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COPL investors look forward to a different kind of funding deal, eyeing new drilling offshore Nigeria

Last updated: 14:10 02 Oct 2017 BST, First published: 12:13 02 Oct 2017 BST

oil and gas operations
COPL is raising ÂŁ2.5mln to cover costs, but, a more significant funding is in the works

Investors continue to look forward to a different kind of funding news from Canadian Overseas Petroleum Limited (LON:COPL, CVE:XOP) as it works to take its Nigerian asset to production.

COPL on Monday announced a ÂŁ2.5mln share placing to cover ongoing general and administrative expenses.

READ: COPL launches £2.5mln fundraise, project-level funding efforts continue

At the same time, the company highlighted that it is continuing work aimed at bringing in funds at project level for its Nigerian venture.

The company said it has achieved ‘encouraging progress’ in the project funding efforts, adding that it remained confident that it will meet the target to drill an appraisal well with an early production scheme following shortly after.

Arthur Millholland, COPL chief executive, said in a statement: "This placing will strengthen our balance sheet while we concurrently work towards finalising the project financing, operations program and plan for our OPL 226 project offshore Nigeria."

Drilling slated for late 2017 or early 2018

COPL’s Nigerian venture is aiming to start a drill programme for the OPL 226 asset, offshore Nigeria, in either late 2017 or early 2018.

The block lies 30 miles offshore in 150ft of water in the Central Nigerian delta, where five wells were sunk historically, three hitting oil and gas  and two hitting gas.

Last month, it was highlighted that the proposed drilling campaign could comprise of two or three wells, as an initial appraisal and development programme ahead of a larger future development.

READ: Canadian Overseas Petroleum boss upbeat on offshore Nigerian opportunity

An early production system could see OPL 226 flowing some 6,000 to 10,000 barrels of oil per day.

It was estimated that a well could cost around US$19mln, but, lower costs may also be possible depending on commercial dynamics.

Plainly there’s plenty for investors to look forward to, but, first they’ll have to see some project funding.

October share placing

COPL is issuing some 250 mln new shares, priced at 1p per share. in afternoon trading, the shares were changing hands at 1.15p each, down 0.35p on Friday's close.

Cash raised in the equity funding is earmarked to cover ongoing general and administrative expenses which mainly comprise covering the head count of geologists, a geophysicist, reservoir engineers, a drilling engineer as well as in-house counsel.

The company noted that its expenses amount to approximately US$410,000 per month, as it works to progress its assets in West Africa.

COPL noted that it also has financial commitments related to its planned activity at its Nigerian joint venture, where new appraisal drilling is planned for late 2017 or early 2018.

The company highlighted that it has engaged intermediaries, COFARCO SAS of Paris and London’s Zeus Capital, to arrange project-level funding for the upcoming work programmes.

The company said it has achieved  ‘encouraging progress’ in the project funding efforts, adding that it remained confident that it will meet the target to drill an appraisal well with an early production scheme following shortly after.

Arthur Millholland, COPL chief executive, said in a statement: "This placing will strengthen our balance sheet while we concurrently work towards finalising the project financing, operations program and plan for our OPL 226 project offshore Nigeria."

 -- Adds share price --

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