Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP, OTC:VELXF) shares rallied 40% in Thursday’s early deals as it extended a forbearance agreement with its senior creditor.
The company, in a statement, said that the lender has agreed to move the forbearance deadline from 29 February to 8 March – as such it stalls an immediate threat of default.
COPL told its investors: “Under the terms of the forbearance agreement, among other things, the senior credit facility lender has agreed not to enforce certain rights and remedies that it might otherwise have as a result of the company's default(s) under the said senior credit facility.
“The company, however, remains in a precarious financial situation with a deteriorating liquidity position as described in the company's recent announcements.
“The company is continuing to consider strategic alternatives, including some form of formal insolvency protection that may or may not leave value in the company's common shares.”
In London, COPL shares traded up just over 42% to be priced at 0.064p.