Canadian Overseas Petroleum shares surge on ‘significant and impressive’ new

“Conventional light oil discoveries of this magnitude have been rare in continental North America for years,” analyst Sam Wahab said.

Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP, OTC:VELXD) shares surged more than 30% in Monday’s early deals thanks to what stockbroker SP Angel has called an impressive and significant new discovery onshore USA, in Wyoming.

It creates the potential for the company to grow to a scale “many multiples” greater than previously forecast, according to COPL.

The discovery, comprising 1.5bn to 1.9bn barrels of oil in place, was identified spanning Converse and Natrona Counties, Wyoming – with the majority of the estimated 1.275bn to 1.64bn barrels present across the company’s leasehold.

It comprises multiple zones and production has already begun from the lowermost, Dakota Fm, with the discovery well BFU-14-30VF flowing between 100 and 120 barrels of oil per day.

“Conventional light oil discoveries of this magnitude have been rare in continental North America for years if not decades,” SP Angel analyst Sam Wahab said in a note.

“COPL controls the majority of this discovery as it is coincident with its large contiguous lease block.”

SP Angel noted that COPL has so far successfully increased production from existing wells in Wyoming.

“This highlights the potential for the Wyoming asset to generate long-term production on a scale many multiples greater than previous forecasts in our view.”

COPL chief executive Arthur Millholland told investors that the company plans a phased production program to develop the resources, applying for four permits to drill horizontal wells.

“We will start exploiting the discovery this year,” Millholland said.

He added: “This is a significant oil discovery and the size of the upside at our Wyoming asset was a surprise to us all,” said chief executive Arthur Millholland.

“We acquired Atomic Oil & Gas in January 2021 aware of the significant exploration upside, however the acquisition rationale and financial model reflected a long-term production flow from existing wells of 5,000 barrels per day,” Millholland said.

“Since then, we have increased production from the existing wells and accelerated our exploration program which has resulted in today’s announced discovery.

COPL in December raised US$8mln to expand its operations in Wyoming – supporting a deal for Cuda Energy LLC.

Previously, in November, COPL was boosted as it confirmed increased oil production volumes from the Barron Flats project in Converse County.

There, production averaged 700 barrels of oil per day, marking a 35% improvement from volumes reported earlier that month.

Its performance was the result of new facilities coming online to reduce the surface working pressures on the most capable producing well in the field.

The well – a horizontal well that has produced at a restricted rate of 150 bopd in the period between August and November – exhibited an exceptional response to its miscible flood scheme.

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