Canadian Overseas Petroleum Ltd (LSE:COPL, CSE:XOP, FRA:V9LA, OTC:VELXF) told investors its recently acquired assets in Wyoming continue to perform well beyond early expectations.
Gross oil production at August 31 measured 2,720 barrels of oil per day, which equates to 1,604 barrels net to COPL and represents some 123% growth from the rates at the field in April. It is up some 24% from rates measured just two weeks ago, COPL noted.
The strengthened performance comes as a result of an ongoing enhanced gas injection programme, which started on April 1 (which was also the effective date of COPL’s deal to acquire the Wyoming assets).
“Oil production will continue to increase as the surface well site production facilities are enhanced to handle the increased oil production rates and associated higher working pressures,” said chief executive Arthur Millholland.
The injection operation is taking place in the Barron Flats Shannon unit, meanwhile, as part of today’s update, the company announced a new discovery at the Barron Flats Federal (Deep) unit where an exploration well has encountered six oil bearing intervals.
“Our next task is to test all six of the sand intervals through casing over the next several weeks,” Millholland said.
“This well is a testament to our team which identified substantial upside below the Barron Flats Shannon Unit, further demonstrating the value of the Atomic acquisition to COPL. The company's enviable block of leasehold as well as its production facilities will allow for additional significant oil production growth.”
He added: “With the oil price and our assets performing well ahead of expectation, the Company is in a very good position for the short, medium and long term.
“We continue to review other value enhancing potential acquisitions in Wyoming as we look to build a material exploration and production company."
Providing financial highlights for the second quarter, COPL said the Wyoming assets acquired as of April 1 generated US$3.9mln of sales revenue. Operating netback was marked at US$30.62 per barrel for the quarter, on 796 bopd average production.
US related costs amounted to US$2.8mln in the second quarter, it noted.