COPL
Announces US$2.5 Million Equity
Financing, Execution of Forbearance Agreement with Senior Lender
and Appointment of Chief Restructuring Officer
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED
HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO
OR FROM THE UNITED STATES,
AUSTRALIA, THE REPUBLIC OF
SOUTH AFRICA, NEW ZEALAND OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BREACH ANY APPLICABLE
LAW OR REGULATION.
LONDON, United Kingdom
and CALGARY, AB, Dec. 29, 2023 -- 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 (the
"Announcement") (i) US$2.5
million of committed common share financing and certain
amendments to the outstanding Bonds (as defined below) of the
Company, as described herein (collectively, the
"Financing") (ii) the execution of a Forbearance
Agreement with its senior lender and (iii) the appointment of a
Chief Restructuring Officer.
Other terms of the Financing include:
- Completion of the Financing is expected by
January 15, 2024 and is intended to be used for working
capital purposes.
- 1,312,232,633 common shares (the "New
Shares") are to be purchased at a price (the
"Subscription Price") of GBP 0.0015 by Anavio Capital Partners LLP or an
entity or entities associated by it (the
"Purchaser").
- The Company will grant the Purchaser warrants equal to at
least 100% of the number of New Shares, with each warrant entitling
the holder to purchase a Common Share at the Subscription Price,
expiring 26 August 2028.
- The conversion price of the Bonds will be amended to the
Subscription Price per conversion share. The maturity date of the
2027 Bonds (as defined herein) will be extended to 26 January 2028, and the maturity date of the
2028 Bonds (as defined herein) will be extended to 26 January 2029.
- The commencement date for any exercise by the Company of
its parity call option under each of the Bonds will be extended to
1 January 2025.
- The exercise price of the existing warrants will be
amended to the Subscription Price, and the expiration date will be
extended to 26 August
2028.
- The Company will appoint one additional independent
non-executive director to be nominated by the Purchaser by no later
than 31 March 2024.
Senior lender support
In concert with the Financing, COPL and its affiliates
entered into a Forbearance Agreement with its existing Senior
Credit Facility Lender and appointed Peter
Kravitz of Province Fiduciary Services as Chief
Restructuring Officer.
Under the terms of the Forbearance Agreement, subject to
certain conditions precedent and continued compliance with the
Forbearance Agreement, the senior lender agrees not to enforce
certain rights, remedy, powers and privileges available to it as a
result existing defaults under the terms of the senior loan
facility before February 29,
2024.
Among other things, the Forbearance Agreement requires the
Company to deliver a cash flow generative business plan which shall
include a sales process for the Company's assets. There can be no
guarantee that such a process will result in a sale or that even if
a sale was completed, will result in net proceeds to the
Company.
Operations
The Company has stopped natural gas and NGL purchases. Oil
production for the 4th quarter, up to December 28, 2023 averaged 1,083 bbl/d
(gross).
DTR
As at the date of this announcement, the Company has a
total of 1,038,771,819 common shares issued and outstanding. There
are no common shares held in treasury and therefore the total
number of voting rights in the Company is 1,038,771,819. This
figure may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the share capital of the Company under the Financial
Conduct Authority's Disclosure Guidance and Transparency
Rules.
MI 61-101
The Company has also determined that the Financing is a
"related party transaction" pursuant to Multilateral Instrument
61-101 – Protection of Minority Security Holders in
Special Transactions ("MI 61-101") and
is exempt from the formal valuation and minority approval
requirements applicable to related party transactions defined under
MI 61-101 pursuant to the financial hardship exemption under
sections 5.5(g) and 5.7(1)(e) of MI 61-101.
The Company relies on the above exemptions on the basis
that (i) as described in the Company's announcement of 20 December 2023, the Company is in serious
financial difficulty because, without the Financing, it does not
have sufficient working capital for its present requirements, (ii)
the Financing is designed to improve the financial position of the
Company, (iii) the transaction is not subject to court approval or
court order, (iv) the Board of Directors of the Company and all
independent directors, each of the foregoing acting in good faith,
have determined that (i) and (ii) above apply and that the terms of
the Financing are reasonable in the circumstances to the Company,
and (v) as at the date hereof, there is no other requirement to
hold a meeting to obtain the approval of the shareholders of the
Company for the Financing.
Definitions
Reference is made to the Bond Instrument dated
26 July 2022 as amended on
24 March 2023 and 10 October 2023 in respect of the issue of
US$20,000,000 Senior Convertible
Bonds due 2027 (the "2027 Bonds") (of which
US$10.6 million principal amount
remains outstanding), the Bond Instrument dated 26 July 2022 as amended on 30 December 2022, 24 March
2023 and 10 October 2023 in
respect of the issue of US$24,000,000
Senior Convertible Bonds due 2028 (the "2028
Bonds") (of which US$10.8
million principal amount remains outstanding) (2028 Bonds
together with the 2027 Bonds collectively, the
"Bonds").
About the Company:
COPL is an international oil and gas exploration,
development and production company actively pursuing opportunities
in the United States with
operations in Converse County
Wyoming.
The Common Shares are listed under the symbol "XOP" on the
CSE and under the symbol "COPL" on the London Stock
Exchange.
Market Abuse Regulation
disclosure
The information contained within this announcement is
deemed by the Company to constitute inside information pursuant to
Article 7 of EU Regulation 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018 as
amended ("MAR") encompassing information relating to the Placing
described above, and is disclosed in accordance with the Company's
obligations under Article 17 of MAR. In addition, market soundings
(as defined in MAR) were taken in respect of the Placing with the
result that certain persons became aware of inside information (as
defined in MAR), as permitted by MAR. This inside information is
set out in this Announcement. Therefore, upon publication of this
announcement, those persons that received such inside information
in a market sounding are no longer in possession of such inside
information relating to the Company and its
securities.
Caution regarding forward looking
statements
This news release contains forward-looking statements.
The use of any of the words "initial, "scheduled", "can", "will",
"prior to", "estimate", "anticipate", "believe", "should",
"forecast", "future", "continue", "may", "expect", and similar
expressions are intended to identify forward-looking statements.
The forward-looking statements contained herein are based on
certain key expectations and assumptions made by the Company,
including, but not limited to, the ability to raise the necessary
funding for operations, delays or changes in plans with respect to
exploration or development projects or capital expenditures.
Although the Company believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements since the Company can give no assurance that they will
prove to be correct since forward-looking statements address future
events and conditions, by their very nature they involve inherent
risks and uncertainties most of which are beyond the control of
Canadian Overseas Petroleum Ltd. For example, the uncertainty of
reserve estimates, the uncertainty that the Financing will
complete, the uncertainty of estimates and projections relating to
production, cost overruns, health and safety issues, political and
environmental risks, commodity price and exchange rate
fluctuations, changes in legislation affecting the oil and gas
industry could cause actual results to vary materially from those
expressed or implied by the forward-looking information.
Forward-looking statements contained in this news release are
made as of the date hereof and Canadian Overseas Petroleum
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
This announcement has been issued by and is the sole
responsibility of the Company. No representation or warranty,
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability is or will be accepted by the
Company (apart from the responsibilities or liabilities that may be
imposed by the Financial Services and Markets Act 2000, or the
regulatory regime established thereunder) or by any of its
affiliates or agents as to, or in relation to, the accuracy or
completeness of this announcement or any other written or oral
information made available to or publicly available to any
interested party or its advisers, and any liability therefore is
expressly disclaimed.
Mr. Tom Richardson,
Chairman, Mr. Ryan Gaffney, CFO,
Canadian Overseas Petroleum Limited, Tel: + 1 (403) 262 5441;
Cathy Hume, CHF Investor Relations,
Tel: +1 (416) 868 1079 ext. 251, Email: cathy@chfir.com;
Charles Goodwin, Yellow Jersey PR
Limited, Tel: +44 (0) 77 4778 8221, Email: copl@yellowjerseypr.com;
Peter Krens, Joint Broker, Equity
Capital Markets, Tennyson Securities, Tel: +44 (0) 20 7186 9033;
Andrew Chubb / Neil Passmore, Advisor/Joint Broker, Hannam
& Partners, +44 (0) 20 7907 850