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London, United Kingdom; Calgary, Canada: August 13, 2021 - Canadian Overseas Petroleum Limited ("COPL" or the "Company") (XOP: CSE) & (COPL: LSE), an international oil and gas exploration, production and development company with production and development operations focused in Converse and Natrona Counties, Wyoming, USA, announces that its affiliate Southwestern Production Corp. ("Southwestern"), operator of the Barron Flats Shannon Miscible Flood Unit (the "Barron Flats Unit"), has filed a law suit in the State Court of Wyoming, Converse County, against the following named defendants: Cuda Energy LLC ("Cuda"), a wholly owned subsidiary of Cuda Oil and Gas Inc. (CUDA:TSXV), Bridging Finance, Inc. ("Bridging"), and Tallinn Capital Energy L.P. ("Tallinn"), to seek a Judicial Foreclosure on Cuda's non operated working interest in the Barron Flats Unit.

Looks like Art is going for 100% of Wyoming. Just when it looked like Cuda might have survived by the skin of their teeth with the growing production and recent funds. But after reading that prospectus and the upside of BFU, CC and CC deeps I don't blame him. Getting Cuda's Wyoming assets is a lot less than Atomics so no need for a second suspension if the court finds in our favour. Interesting chess move that, check mate perhaps? Cnooc in the sights next I guess.

Regards,
Ed.

On the 26th of July when they released the Q1 report.

Regards,
Ed.

Miag,

The impression that I'm getting is that they'll relist when Atomic has been integrated into COPL and they can be reported as one company. According to the Q1 release we're in the final stages of that progress. If they were to wait for BFU peak production that's projected to be about end of 2022. As for peak rates from 226 and Cole Creek/Cole Creek Deeps etc that's really hard to put a time on given the drilling upside and number of locations there. As a guess I'd say we'll be back this month or next, but certainly not dwelling on it as it makes little odds in the grand scheme of transition to mid cap/large cap.

Doug,

I agree no real material change in Q2, if they had agreed a solution to the NOP default or anything other material event we would have heard before 30th June. However I'm expecting an increase in production during Q2 as injection started at the beginning of Q2. My guess is that Q2 entry rates were similar net to Q1 of around 700bopd net. I as a guess would imagine that by the end of Q2 average daily net rates were about 950bopd net. Then end of July we're now closer to 1100bopd net, perhaps over the last week or so maybe 1150bopd net. The material change was reported in Q1 report with the increased of 50% to gross 1800bopd to current production. But hopefully we'll find out the exact figures by the end of the month, perhaps by then current production may be 2000bopd gross. Again I'd expect all this to be covered in the comprehensive ops update coming.

Regards,
Ed.

Doug,

I believe that your statement that gas flood had no impact on production in the June Q to be wrong. Increased injection rates occurred from April 1st, pressure lags behind that by about two months, so therefore the miscible flood should be kicking in towards the end of the Q (gradually building pressure before that though), probably having a noticeable impact from around mid May. I severely doubt that the 50% increase in production came only between 1st July and 25th July, but was much more gradual throughout Q2 as pressure gradually built up.

As for the relist, the last we heard was that we'll get a timetable from the company when they're ready to relist and also the comprehensive ops update. So I don't think endless speculation will get anybody anywhere on a suspended stock, but as Art said he's finalising the doc we must be getting close to the end of the process. Not really sure how much difference an August or September relist will make to anyone apart from those those that are looking to immediately trade the stock.

Regards,
Ed.

Nice one Evan I hope you were one that was in early on EUA, some of us have already cashed out of it. But you're in a good position for sure. In many ways Oilexco (our CEO's former company) was a similar story to EUA in that it went from a cap of about C$30m to an eventual peak of around C$4bn. I was there from the first cluster well on Brenda and sold long before the eventual peak. I reckon we're on for a similar ride here. This is AM's last shot at mid cap/big cap imo, some might sell when the company is only producing 1800bopd gross, some might wait for full development of Wyoming or indeed several other assets (15% of 226 if successful, additional EOR project etc) and a substantially higher market cap.

Personally this is my largest shareholding and I'm very comfortable with that because there's pretty modest risk on the USA assets, there's really no need to go off chasing exploration companies or those operating in exotic locations when COPL can increase value by just injecting more gas (even if it stays at the current net wi in these assets). Some will go off and lose elsewhere but that's their choice. We've even de-risked Nigeria by letting Essar take control of that too, no significant spend by COPL until they see the outcome of Noa-2. In many ways it was just like sitting on a pile of EUA at under 0.4p why sell early when the rise looks fairly inevitable imo. Our oil reserves are now worth many times our market value (regardless of what happens to Cuda). AM bought the stuff at $2.18/bbl and is now selling it over $70/bbl (apart from the hedged production of course) but production continues to rise. Nothing wrong with selling at a profit as long as what folks are buying gives an equal or better opportunity and that will be very very hard to find as I've been looking. I plan to keep COPL as my largest holding for the foreseeable future.

Regards,
Ed.

Tiburn,

Its sure worth keeping an eye on those horizontal wells as you're doing for sure. Also page 3 of the Cormark report on Cuda will raise some eyebrows. A well close to CC field to the North came online at around 1300boepd, also others in the basin have done as high as 4k boepd.

https://542357-1754095-raikfcquaxqncofqfm.stackpathdns.com/wp-content/uploads/2019/04/CUDA_Initiating_Coverage_21012019_CORMARK.pdf

But anything from 400-4k boepd would be great per well as that could be funded from the low risk vertical infill/deve wells drilled into the Upper and Lower Shannon at BFU and CC. This is the significant upside that Art hinted at in the presentation you posted earlier. Roll on the relist as that's when things only start to get interesting.

Regards,
Ed.

Tiburn,

Agreed, that's what makes this one so exciting, its what can be done with these assets at low cost. Already we can see the correlation with the 10mmcfd and 1800bopd by July, with rates estimated to go to about 4,000bopd by year end. The increased gas and propane injection results in increased gas production as the chart clearly shows. As the oil is produced there's more void space down there to be filled with gas to maintain and increase the reservoir pressure. Therefore gas rates gradually increase to 23mmcfd or there about from around 16mmcfd re-injection and about 8mmcfd bought. This would need to be maintained imo to keep production at 6,000bopd plateau for multiple years as the production profile shows.

The clear upside is shown by the fact that the oil production from the BFU peaks at around 8000bopd by around the end of next year (not a long way away). Before it settles back to about 6,000bopd. Likewise for CC the gas injection is to cause peak production of 3500bopd, lets guess for now 1 year later say end of 23 as a guess. However we'll have to add to that the as yet unknown potential of the horizontal Dakota and Frontier wells and the significant potential of the deep horizons. So if all stays on the rails we should be looking at 10,000-12,000bopd gross over the next 18-36 months, perhaps higher depending on the horizontal results (some of our neighbours have had impressive flow rates per well). That's what makes the outcome of the NOP very interesting for us.

But the growing production at the current net levels and COPL's substantial cash balance should make the option with Essar on 226 easily affordable. Nigeria could as we know add substantial 2P from Essar's planned 18 wells, we even get a free crack at Noa-2, letting Essar take the risk. So they certainly have a path from current assets (let alone pre-licence spend on additional acquisition) towards mid cap. There is no way that I can see that the NOP can keep up with our pace on the vertical and horizontal drilling plans, so we're gonna have a very very interesting 18 months ahead for sure.

Regards,
Ed.

Stebol,

Well the talk was that COPL are in negotiations with Cuda's other creditors from those that posted from the AGM. Not sure that any of those costs would constitute pre-licence, that's more likely to an outright acquisition of at least the Wyoming assets. What may entail pre-licence costs though would be say a mature field that may have been relinquished as its no longer in production. If that were a licence application for EOR that may well entail pre-licence costs. Its all speculation, but its certainly costs towards a new additional acquisition that much we do know.

Regards,
Ed.

Stebol,

Yes that too is a real possiblity as Cuda need some serious refinancing and very cooperative creditors (which includes Atomic/COPL). Will be very interesting to see what happens on that front soon too. But pre-licence costs sounds like a new project that's getting more active/increasing spend (perhaps site visits or sign on fees). Perhaps its Nigeria or Cameroon, we'll perhaps see in due course if a formal offer is made. but its still being included in the financials.

Regards,
Ed.

Again Mozanbique licence not licensee!

Regards,
Ed.

No can't see them returning there as they recently relinquished their licensee there. However I wouldn't rule out the west African EOR project that was mentioned, it could be it. I think the previous Q had $19k (from memory) pre-licence costs for that Q, now its $150k for Q1. So stepping up activity it seems. Listing first then who knows what's next.

Regards,
Ed.

With talk about beta blockers etc perhaps those of weaker disposition may want to look away now.

Page 11 of today's results:

"Pre-license Costs

The Company recognized $150,000 as pre-license costs for the three months ended March 31, 2021 that related to
an anticipated new acquisition project. No pre-license costs were incurred for the same period in 2020."

Again hints of this new acquisition, certainly a step up in spend towards this new asset compared to the last results.

Regards,
Ed.

Should have said costs per bbl will be a bit higher at the start of this process due to the capex, not netbacks higher. I should proof read some on my posts. :)

Regards,
Ed.

Great posts Caw Caw and Tiburn! Agreed 100%! To quote Arthur about the production profile of these assets from the early videos, he said something along the lines of production and profits just keep going up and getting higher and higher per Q. We're seeing the start of this now. Not surprisingly netbacks will be a bit higher per bbl at the start of this process than when they're injecting 10mmcf when at a peak of 7000bopd+ between the two fields, the higher the production the higher the netbacks per bbl.

As the miscible flood restarted again in April after the seasonal high gas prices its been remarkable, as 2-3 months for the pressure build up and then already the production is already showing 50% increase over this short period. Obviously good continuity and reservoir quality down there. Its exciting to think what this production profile will look like by year end. Then we have COPL's shopping list of things to do (Horizontal wells, reactivation of Cole Creek, more vertical wells into BFU and then perhaps the Nigerians will cooperate with 226). So hands up who else is on the edge of their seat to see the comprehensive ops update around relist? There's some days that I'm glad that COPL is my largest holding, this is one of them, the next one will be on their relist! Looking forward to see the volumes of trading once relisted.

Regards,
Ed.

If I were you I wouldn't get too hung up on any of the early quarterlies. The acquisition has an effective date of 1st Dec 2020 and will be contributing since then. However even Q2 will be modest compared to future production as increased injection rates only started in April, they'll only really be impacting on production by June. So I wouldn't expect anything too dramatic in the Q2 report. As Arthur suggested it takes 2-3 months after injection to see the real impact of that. There will be a large leap in NAV now that the assets have completed and COPL are sitting on circa 30mmbbls of light oil, moreover for COPL to record its first production is a milestone in its own right.

Q3 will be much more interesting though, not just from the relist point of view, but this Q we should be seeing the real impact of the increased flow rates and cash flow for the full Q, not just the pressure in the reservoir building up to June. Also thing with the small NOP should come to a head this Q, will they find any more generous lenders or will it finally be crunch time. I'm not expecting much drama from the Q1 or Q2 reports, its what's happening now or shortly after listing is where the start of the real action will be. From NOP interests, CNOOC, 226 and possible new EOR project its not going to be dull but its very much only the start of this journey.

Regards,
Ed.

Yes they'll have to submit a plan of testing to the T&T authorities who will want the well tested from bottom up. But from what I've seen over the years the process us much simpler in T&T than it is in the UK. Look at the hassles that the likes of UKOG, EOG and UJO for example have had with getting permissions for drilling, testing and production etc onshore UK. Way too much local community input in the UK.

Regards,
Ed.

Starchild,

Test flow rates and production rates are usually very different things, production rates will take into account reservoir management. That will also be determined be extended well tests. Also comparing gas wells with oil wells is a little apples vs oranges as gas price is a fraction of the oil price.

Many factors determine the flow rates from a well and extent of net pay is only one, others being reservoir quality, pressure (therefore oil and gas shrinkage), saturation levels and possible water cut etc etc. So there's too many variables. Reservoir damage or washout from drilling can also alter these. Also those wells you are referring to are in South Central T&T many kms away from the SWP.

CEG have multiple licences in the SWP and the Bonasse licence is only one of those, most of them came with the BOLT acreage, on that there's approx 12 targets that range in size from about 20mmbls in place (Saffron) up to about 220mmbbls in place. So the total for all of these prospects will be much larger than the total you quote.

The best observation of the flow rate potential of Saff-2 is to wait until they conclude the flow tests and see what they report. :)

Regards,
Ed.

Evan,

1p is potentially doable in the near term as we've picked up some impressive inisti support just prior to suspension. Also Nigeria might move on 226 before year end too, who knows. Hopefully giving Art and team enough time to make a material difference to the production from BFU and perhaps CCU too. For 3-5p pre-suspension price eqv we'd really need to see 226 move forward pretty rapidly. I've said for a few years now this could turn into Oilexcco 2.0 (without the semisub rigs and large debt), i.e transformational growth. Once he establishes the production base in USA and possibly Nigeria too I'd like to see them go back to the NS, lots of companies there looking jv for a well funded producer like future COPL now that the larger companies are pulling back/out.

Regards,
Ed.

Thanks fellas, fingers crossed we'll have more idea about the schedule on or before the 26th of July. Hopefully then with the financials potentially sorted they can get the schedule out for the AD and relist and get the show back on the road again. Given the modest suspension market cap I'm expecting trading to be as brisk as before they suspended. :) Perhaps even more.

Regards,
Ed.

Regards,
Ed.

Just to clarify my last post as it was typed quite quickly, the boe price for reserves acquired was just over $2/boe, but oil was $39/bbl at the time of acquisition. :)

Regards,
Ed.