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UPDATE - COPL's window of opportunity for Liberia well is still open

“From a timing perspective, we believe there is still a lot of time for the drill programme but the window is shortening for us to accomplish what we want to accomplish,” Chris McLean, COPL chief financial officer told Proactive.
UPDATE - COPL's window of opportunity for Liberia well is still open

-adds management comments and additional detail-

Reduced numbers of necessary foreign workers in Liberia due to the outbreak of the Ebola virus in West Africa has meant that Canadian Overseas Petroleum’s (LON:COPL, CVE:XOP) planned offshore drilling programme will be delayed.

COPL has a 17% stake in the ExxonMobil operated Block LB-13 offshore exploration project.

Nevertheless the company says the technical assessment of the project area, including geological modelling, continues and new targets have now been identified and mapped as a result.

"We continue to make significant progress with the technical evaluation of Liberia,” chief executive Arthur Millholland said in a statement.

“Whilst the possible delay in the commencement of drilling is regrettable, the safety of the partnership's staff is paramount and we are confident that staff numbers in country will return to normal levels in the near future."

There are alternative approaches that could yet see the first exploration well drilled within the previously envisaged “window of opportunity” for the programme.

Rig availability is not considered a problem and long-lead items are understood to be in-hand, therefore it is mainly a matter of logistics and contingency plans are currently being worked on.

One possible solution would be the re-location of the envisaged shore-based support to a neighbouring country such as the Ivory Coast or Ghana.

It is not wholly uncommon for support and rig operations occurring in separate territories – recently Africa Petroleum’s rig was operated out in Ghana, while Anadarko and Chevron’s programme was supported from both Liberia and Ivory Coast.

“These aren’t huge logistical issues to get over, it is just the practicalities of the planning that went into preparing an operation in one place has to be adapted for another,” Chris McLean, COPL chief financial officer told Proactive.

“From a timing perspective, we believe there is still a lot of time for the drill programme but the window is shortening for us to accomplish what we want to accomplish.”

Once an operational plan is finalised and confirmed it is likely to take between 60 to 90 days for drilling to actually begin. As such, it is still possible that the first well could still go down this year with a second well potentially following next year.

This morning, COPL also gave investors an update into its expansion plans – with potential new acquisitions in West Africa.

COPL also told investors that it has, as the operator of a consortium, bid for an asset in an area it describes as the West Africa Transform Margin.

While details were somewhat scarce, as the award has yet to be approved, COPL did reveal that the consortium includes what it called “a prominent producing independent African energy company”.

It expects to be in a position to provide an update on the bid during the third quarter.

The company also continues to evaluate opportunities in Nigeria, though its option over the OPL 2010 block has now expired. It still has eyes for OPL 2010, but COPL said it is also evaluating and negotiating several other assets in Nigeria.

It is in negotiations to acquire two offshore blocks, both of which include appraised discoveries with contingent resources. It has also been invited to participate in the G&G (geophysical and geochemical) study for a deep water offshore block.

Opportunities in the country play to management’s strengths and experience, COPL said.

Millholland added: "The company continues to be motivated by the opportunity that exists in West Africa for exploration and development of the WATM as regional companies look to partner with experienced management teams.

“The COPL team has been part of the evaluation of deep water prospects and the development of mid-water production schemes over the last 30 years. It is this combination of experience and access to undeveloped assets that are creating these opportunities.”

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Canadian Overseas Petroleum Limited Timeline

August 17 2018

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