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Canadian Overseas Petrolem Ltd shares surged on Monday after the company reported a ‘material’ increase to its oil and gas reserves.
Shares in the London-based oil and gas exploration and development company focused on Wyoming were trading 6.2% higher at 15.61 pence per share in London on Monday morning.
Canadian Overseas received a reserve report prepared by Ryder Scott Company LP to reflect the addition of Cuda Energy LLC assets. Candian Overseas acquired Cuda in July.
Net working interest total proved reserves were reported at 17.3 million barrel of oil equivalent in July 2022, up from 11.7 million boe in December 2021, an increase of 47%. Proved plus probable assets increased 39% to 31.3 million boe from 22.6 million boe over the same period.
Candian Overseas reported the net present value for the proved assets improved by 93% to $254.8 million from $131.9 million and by 91% to $492.1 million from $257.9 million for the proved plus probable value.
The improved reserves resulted from the company's acquisition of the assets of Cuda and the increase in crude oil prices.
President & Chief Executive Officer Arthur Millholland commented: ‘The updated reserves of the company...illustrate the benefit of the timing of our acquisition of the Cuda assets in a high oil price environment. We purchased these assets for $19.2 million with the incremental reserves acquired at a cost of $2.20 per barrel. This is a remarkable metric to the comparative valuation of the proved and probable reserves of $15.70 per barrel as at July 31, 2022.’
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