- Canadian Overseas Petroleum (CSE:XOP) secures financing for its Niger Delta project
- The company received C$200,000 from its CEO Arthur Millholland via a promissory note
- Monies to be used to develop OPL 226
- Drilling on the project site is expected to begin this year
- There was no movement on XOP shares, which traded at half a cent per share
Oil company Canadian Overseas Petroleum (CSE:XOP) has secured financing to further its joint-venture OPL 226 project in Nigeria.
The company entered into a promissory note with its president and CEO, Arthur Millholland, for a principal amount of C$200,000 which is repayable six months from an issue date of February 14.
The amount also bears interest in Canadian dollars at 10 per cent per annum.
Canadian Overseas Petroleum (COPL) does not have to pay the principal amount or the interest before the maturity date. However, it can opt to pay part or all of the principal amount prior to maturity.
Millholland said the move reflected his faith in the company’s efforts to begin drilling this year.
“This loan, which reflects my confidence in the company, will generate the necessary funds so we can conclude the additional financing measures needed to commence appraisal drilling of OPL 226 within our targeted timeframe of 2020,” he said.
“Together with our joint venture partner we continue to be focused on concluding the placement of the OPL 226 performance bond by our Nigerian affiliate and progressing the operational plan for the commencement of operations.”
The company said it is discussing further financing for the project with strategic investors and global service providers, particularly for the provision of services for its early production scheme and a performance bond to the Nigerian government.
According the to the Nigerian National Petroleum Corporation, companies wishing to buy and sell the country’s crude oil must “demonstrate their commitment to the oil industry through allocation of adequate resources of capital, equipment and manpower”.
One of these conditions is the payment of a c$1.3 million (US$1 million) ‘performance bond’ to a Nigerian bank.
COPL’s project is located 50km offshore in the Niger Delta and is operated by Esser Exploration and Production Limited (Nigeria).
The company owns an 80 per cent stake in Esser Nigeria via its JV company – Shoreline CanOverseas Petroleum Development Corporation – with Shoreline Energy International Limited.
A follow-up drilling program of two to three additional wells would commence after drilling the initial appraisal well, with the company wishing to bring three to four OPL 226 appraisal wells into production at an expected rate of 6,000 to 10,000 barrels per day.
There was no movement on COPL shares, which traded at half a cent per share.