“The acquisition of Atomic Oil and Gas LLC which closed in March of this year was transformative for COPL,” chief executive Arthur Millholland said
Canadian Overseas Petroleum Ltd (LON:COPL, TSE:XOP) described a remarkable year as it filed its full-year results.
“The first half of the year was difficult, but was truly outstanding at year-end,” chief executive Arthur Millholland said in a statement.
“The acquisition of Atomic Oil and Gas LLC which closed in March of this year was transformative for COPL.
“In 2020 we managed to recapitalize the company which allowed for the acquisition of Atomic and the associated equity and debt financings.”
Millholland added: “We look forward to the Q1 2021 reporting as it will be the first one to include the operating results of our Atomic group as well as an update on their operations.”
The ‘game changing’ Atomic deal was worth a total of US$54mln, comprising a US$1mln deposit, US$26mln of assumed debt, US$23mln of debt and cash payments, plus US$4mln in shares.
It brings producing assets in the US state of Wyoming, the Barron Flats Shannon Unit (57.7% owned by Atomic) and Cole Creek Unit (66.7% owned by Atomic).
The two fields have 31.1mln barrels of proved and probable reserves and are at the start of a 40-plus year life. The company noted that the acquisition offers a return on investment in excess of 50%, with the deal pitched at an acquisition cost of US$2.18 per barrel versus a net present value of US$7.52 per barrel.
Barron Flats is producing around 1,400 barrels per day (bpd), up from 200 bpd in 2017, and is forecast to reach a plateau rate of 5,000 bpd gross by 2022 whilst Cole Creek is forecast to have a 3,500 bpd plateau by 2026.
The company noted that its results report and regulatory filing documents will be available on its website and SEDAR.