Canadian Overseas Petroleum (COPL) results “ahead of expectations”
10:14, 15 November 2021
Canadian Overseas Petroleum announced its third-quarter results and an operations update on Monday and reported results ahead of expectations.
The international oil and gas exploration and production company, with operations focused in Wyoming, said it had continued to perform well.
“Our Wyoming assets continue to perform well beyond our initial expectations,” said group president and chief executive Arthur Millholland.
The group also told investors in its third-quarter results for 2021 that net oil sales had averaged 1,077 barrels per day (bpd) for the quarter, up from 796bpd in the preceding three-month period.
However, Millholland also highlighted that the figures were somewhat offset by higher butane prices.
“Unfortunately, unexpected tight supplies of NGL’s [natural gas liquids] in the North American markets impacted our miscible flood injection [oil recovery] plan in September and October. These tight supplies also caused the price of butane to reach seasonal historic highs during this period,” he said.
“Fortunately, we have approximately 1,000,000 gallons per month of butane purchases hedged at $0.91 per gallon for 2021, relative to current spot prices of $1.61 per gallon.
Our butane hedge for 2022 on similar monthly volumes drops to $0.76 per gallon. As we expect the North American NGL market to remain tight through the winter heating season, our hedging programme will have a very positive impact on the operating results of the company for the balance of the year and for 2022,” he added.
In a further breakdown of its third-quarter results, the group said petroleum sales amounted to $5.2m – offset by a $0.6m loss on crude oil hedge contracts, as compared with $3.4m offset by a $0.3m loss on crude oil hedge contracts in the second quarter of 2021.
Moreover, the operating netback [gross profit] was marked at $26.70 per barrel, the company said. It noted that operating netback was lower in the quarter, mainly due to increased maintenance activity.
Shares in COPL were down 4.5% at 28.67p on the London Stock Exchange on Monday morning.