The company said it had paid US$8mln as the second payment under the agreement to buy Atomic, which secures it a 15% interest in Atomic’s leases.
At the same time, COPL confirmed it had closed an equity issue to raise £3mln which is in addition to a £6mln raise announced at the end of December 2020. The share issue is at the same price and same terms.
"The US$8mln payment to Atomic announced today is the first milestone achieved to complete the overall acquisition,” said Arthur Millholland, COPL chief executive in a statement.
“The quality of the assets we will acquire under the Atomic acquisition speaks volumes to our ability to access the equity markets and to fully conclude the placing entered into during the difficult holiday period."
Chief financial officer Ryan Gaffney added: "The closing of both portions of the placing will allow the company to progress the Atomic acquisition. COPL's access to the equity markets has provided much confidence to debt investors with whom we are in discussions with to provide the balance of funds required to complete the transaction.
“We are targeting the receipt of binding term sheets from the targeted investors in the near term thus allowing COPL to progress to completion."
The Atomic deal is worth a total of US$54mln - comprising a US$1mln deposit, US$26mln of assumed debt, US$23mln of debt and cash payments, plus US$4mln in shares.
In December, COPL described it as a game-changing acquisition. It delivers producing assets in the US state of Wyoming, the Barron Flats Shannon Unit (57.7% owned by Atomic) and Cole Creek Unit (66.7% owned by Atomic).
The two fields have 31.1mln barrels of proved and probable reserves and are at the start of a 40-plus year life. The company noted that the acquisition offers a return on investment in excess of 50%, with the deal pitched at an acquisition cost of US$2.18 per barrel versus a net present value of US$7.52 per barrel.
Barron Flats is producing around 1,400 barrels per day (bpd), up from 200 bpd in 2017, and is forecast to reach a plateau rate of 5,000 bpd gross by 2022 whilst Cole Creek is forecast to have a 3,500 bpd plateau by 2026.