Canadian Overseas Petroleum shares rebounded 52% on Thursday morning, after falling even more on Wednesday following a warning it was struggling to meet upcoming senior credit facility covenants.
In a statement last night, the US-focused oil producer said it did “not currently have sufficient working capital for its present requirements,” and needed to raise extra funds by the end of March to continue trading.
Paraffin production at its Wyoming plant was hit by poor weather between December and January, causing longer waiting times for trucks and management.
Storms also completely closed its Barron Flats Shannon unit (BSFU) in late January, cutting oil production.
COPL had been suffering from inflationary pressures, alongside the infrastructure bottlenecks, leading to its need for a new financing round due in early February.
The junior also reported an US$8mln loss on its oil and butane hedge contracts, an US$8.1mln payment on debt servicing and a further US$2.9mln towards its senior credit facility.
BSFU is set to get an upgraded gas gathering system this year, given COPL secures enough funding, although output from the plant is expected to remain “constrained” until then, it said.
Shares rose 52% to 8.7p.