The Canadian Overseas Petroleum Limited (LON: COPL) share price fell 10.1% after its Q4 2022 financial results were released. The oil and gas company generated net royalties of $6.7 million from petroleum sales compared to $7.1 million in Q3 2022. The firm attributed the revenue drop to lower crude oil prices in Q4 2022.
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COPL incurred a net realised loss of $2.2 million from its hedging activities, marking a slight decline from the $2.3 million net hedging loss realised in Q3 2022. The hedging loss came from a $2.7 million loss on crude oil contracts, offset by a realised gain of $0.5 million from butane contracts.
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The company managed to restructure its crude oil hedges in December due to the overall weakness in the West Texas Intermediate (WTI) crude oil index. The restructuring allowed it to unwind some unfavourable positions without a cash cost and in a way that minimised its near-term hedging losses.
COPL also revealed that it had encountered some operational bottlenecks created by the undersized low-pressure gas gathering system (GGS), which could not handle the high pressure and volume of gas arriving at the producing wells and delivering to the gas plant for recycling.
The company plans to start phase 1 of the GGS upgrade, which will fix much of the low-pressure GGS restrictions in the centre of the field, with future phases tackling the same issue in the outlying wells.
COPL issued convertible bonds worth $4.0 million on 30 December 2022, which raised net proceeds of $3.2 million. The oil and gas firm had $4.0 million in cash at the end of December 2022, marking a drop from $5.7 million at the end of September 2022.Â
The company paid off one of its arm’s length creditors by issuing 2,292,370 common shares worth $0.2 million on March 30, 2023, to preserve capital. The firm has settled debts worth $2.4 million via this method.
COPL has started procuring pipe and other long lead items needed for the GGS Phase 1 upgrades, which it will install during Q2 2023.
*This is not investment advice.
COPL share price.
The COPL share price fell 10.08% to trade at 5.62p, from Friday’s closing price of 6.25p.
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