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COPL boss lays out plan to increase oil flows by three times in new Wyoming asset


Hello and welcome to the latest London South East CEO interview: today we are joined by Arthur Millholland, President and CEO of COPL, Canadian Overseas Petroleum Limited (LSE:COPL), which is listed in Canada and London.

* COPL recently agreed to purchase two producing oil assets in Wyoming USA.
* COPL raised £9 Million pounds in December
* COPL has now signed a Term Sheet for $65 Million dollars to finance the acquisition of 57% of Atomic Oil & Gas.

COPL have arranged and financed the Atomic Oil deal very quickly so I started by asking Arthur if this had given sufficient time for due diligence.

"We started looking at this opportunity at the end of August. It was certainly opportunistic on our part, and truthfully if the oil price hadn't dropped at the beginning of last year this asset wouldn't have been for sale. We know the asset quite well and all the due diligence has been done." said Arthur.

The deal has been structured so that initial revenues are sufficient to cover the cost of debt. " The key thing to understand is that the primary field, Barrons Flat in Powder River Basin, Wyoming has been 'missable flooded'. This means they are pumping (a mix of) natural gas and propane into it to enhance the ease of recovery and increase production. By this time next year production should be three times, maybe more than it is today. The terms of the loan reflect that."

Atomic is the operator and all the facilities are brand new. "There are no legacy issues around old wells and abandonment and reclamation issues. Its a very environmentally friendly, there is zero gas flaring because gas is reinjected into the reservoir, and there is no methane emissions from the facility. Its windy in the basin, all the equipment is run off electricity and powered by a wind farm next door."

"We inherit the team in three weeks time, and a lot of what they were doing was capital constrained and our technical team in Calgary can do an awful lot to assist them. We will also increase the gas injection to three times the amount, up to its intended rate to accelerate the increased rate of production, which also means no new drilling there at Barrons Flats for at least a year." he explained. "Meanwhile, next year we plan for more drilling wells and more injection wells."

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