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Canadian Overseas Petroleum Ltd about to complete Atomic Oil and Gas acquisition


Canadian Overseas Petroleum Ltd ()(CSE:XOP) announced the acquisition of Atomic Oil and Gas is expected to close on Tuesday.

The Atomic deal is 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.

READ: Canadian Overseas Petroleum raises £14mln to hit the ground running with Atomic assets

In December, COPL described it as a game-changing acquisition. It delivers 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 Denver Colorado area, where Atomic is headquartered, and the western states were impacted by a severe winter storm yesterday which caused disruption in the process of the transaction completion,” said Arthur Millholland, president and chief executive of COPL, in a release.

“It is on track to happen today and we are excited to finalise the process.”

Shares advanced 6% to 0.37p early on Tuesday.



Read More: Canadian Overseas Petroleum Ltd about to complete Atomic Oil and Gas acquisition

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