Calgary-based oil and gas company Canadian Overseas Petroleum Limited (COPL) on Monday announced a £2.5 million share offering to cover its expenses as it works to secure funds for an appraisal project offshore Nigeria.
COPL announced the offering of common shares in the capital of the company to raise gross proceeds of £2.5 million ($3.3M), pursuant to which the company will issue 250 million of new common shares to UK investors at a price of 1 penny (£0.01) per placing share.
The company said it intends to use the net proceeds of the placing to fund its on-going general and administrative expenses which principally cover a full technical team including geologists, a geophysicist, reservoir engineers, a drilling engineer and in-house counsel, which are approximately $410,000 per month, as the company seeks to progress its projects in West Africa.
The company’s other financial commitments for the 12-month period include 50% of the costs relating to Shoreline Canadian Overseas Petroleum Development Corporation’s (ShoreCan) commitment to invest funds in the form of an interest-free shareholder loan to be used for its 80% owned Essar Exploration and Production Limited (Nigeria) operations.
As previously announced, the company has engaged COFARCO SAS of Paris France and Zeus Capital of London United Kingdom to source the required funds at the project level and is making encouraging progress towards securing funds for its appraisal and development project at OPL 226, offshore Nigeria, held through a partnership with Shoreline Energy. The license is located in the Niger Delta province in water depths ranging from 40 to 80 m and it has an area of 1530 sq. km.
The company reiterated it remains confident that it will meet the target to drill an appraisal well in late 2017 or early 2018 with a subsequent Early Production Scheme being put in place shortly after.
Arthur Millholland, President & CEO, commented: “This placing will strengthen our balance sheet while we concurrently work towards finalizing the project financing, operations program and plan for our OPL 226 project offshore Nigeria.”