Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP) (COPL) said it is advancing towards construction for a key upgrade to the Barron Flats Shannon Unit (BFSU) operation, in Wyoming, USA, where work is slated to begin before the end of this month.
The project is to build a high-pressure gas gathering system, cost estimated at US$4.5mln, meanwhile, procurement of long-lead items for the system and upgrades to the wellsite facilities is also underway.
"Our recent bond issue has allowed the company to embark on long-planned projects to remove the constraints and bottlenecks to our oil production from our Barron Flats miscible flood,” COPL chief executive Arthur Millholland said in a statement.
“We are embarking on these projects after a very difficult winter in Wyoming with near-record snowfall and low temperatures experienced in multiple severe winter storms.
“Spring though has come, and with it the issues of warmer weather which will be temporary," he added.
Work to convert the BFSU’s flowing wells into pumping-flowing wells has also now commenced, COPL added.
Once completed, COPL anticipates that the project will allow for increased oil production which has been restricted mainly due to high pressures associated with the gas. Additionally, it says that through configuring the producing wells it should also reduce paraffin-induced production interruptions.
The work programme is expected to increase overall production and significantly reduce field operating costs.
COPL meanwhile reported that its production averaged 1,200 barrels per day in the first quarter of 2023.
It also noted that its second well recompletion of the Frontier-1 well, at the Cole Creek Unit (CCU), will begin in the second quarter. COPL said it was encouraged by the first unstimulated recompletion, which took place in December but was curtailed due to severe winter weather.
Elsewhere, joint venture talks are ongoing with a large oil company and are focused on commercial terms. COPL noted that further details, including the identity of the potential partner, remain confidential – albeit, it noted that substantial additional technical evaluation has been undertaken during the quarter.
Millholland commented that he is encouraged by the recent progress.
COPL additionally noted the appointment of Thomas Richardson as a non-executive director of the company. He comes with a background as a director of multiple natural resources companies and before that work in investment banking for names such as ING, JP Morgan, and Rothschild.