Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP) (COPL) has been granted a covenant waiver after severe weather in Wyoming affected production at its Barron Flats Shannon (BFS) and Cole Creek operations.
Arthur Millholland, chief executive, said that snow drifts had reached 8-10ft at times due to the winds and the safety of its field personnel was the priority.
Production currently is 1,400 barrels daily, but access to storage facilities is being restricted by the weather. Output in January was 1,080 barrels a day and in February 1,200b/d, but BFS and Cole Creek are currently shut-in.
COPL added that its lender has extended its liquidity covenant measure until 14 March and will base it on average cash of US$2.5mln between 15 January and 13 March 2023.
Millholland added: "Those familiar with these conditions east of the Rocky Mountains in the north-western United States and Western Canada understand the issues to production operations and accompanying safety concerns related to field personnel.
“Most importantly our principal stakeholders understand this too, and are working with the company to exit this period stronger than it entered."