Oil company Canadian Overseas Petroleum Limited (COPL) has borrowed CAD$200,000 from its CEO Arthur Millholland. The company said the loan would help it „progress“ OPL 226 project offshore Nigeria.
In a statement on Friday, COPL explained it had entered into “a Promissory Note” with Arthur Millholland, President, and CEO of the company, for a principal amount of CAD$200,000, with the note repayable by the company in six months from the issue date. The note bears interest of 10% per year.
COPL plans to use the cash for general working capital and primarily for the progression of its development and financing plans for the OPL 226 project, offshore Nigeria, an area of 1530 km2 situated in water depths ranging from 40 to 180 meters. The company hopes to drill an appraisal well in the block this year to test the NOA oil discovery made in 2001.
“Immediate funds will enable the company to continue discussions with investors and service providers with a view to commence drilling of the first appraisal well at OPL 226 in 2020,” COPL said Friday regarding the loan agreement with the CEO.
Arthur Millholland, President and CEO, commented: "This loan, which reflects my confidence in the company, will generate the necessary funds so we can conclude the additional financing measures needed to commence appraisal drilling of OPL 226 within our targeted timeframe of 2020.
"Together with our joint venture partner, we continue to be focused on concluding the placement of the OPL 226 Performance Bond by our Nigerian affiliate and progressing the operational plan for the commencement of operations."
Funding talks underway
As for the OPL 226 performance bond, back in October 2018, Nigerian national oil company NNPC granted conditional approval of a twenty-four months extension of the Phase-1 exploration period in the block until October 1, 2020.
The extension is subject to certain conditions, including submission of a performance bond of $7 million that is required further to the PSC, to cover the Phase-1 exploration period work program at OPL 226.
COPL said Friday it was „currently in discussions with strategic investors as well as global service providers to secure financing for the placement of the OPL 226 Performance Bond and for the provision of services for the early production scheme and other project financing costs.“
COPL plans to drill the first appraisal well at OPL 226 during 2020, subject to financing and regulatory approvals, and place it in production through an Extended Well Test utilizing an Early Production System. This is intended to be followed by the drilling of two to three additional similar wells on the prolific NOA Structure. This phase of the project would precede a full field development plan, to be implemented following OML conversion.
"COPL's current intention is to eventually bring three to four appraisal wells at OPL 226 onto production at a forecast rate of 6-10,000 bpd per well," COPL said.
According to a COPL presentation, the OPL 226 block has a best estimate of 2C contingent resources of 16 million bbls (gross) and Unrisked prospective resources of 533 million barrels (gross) of oil. Fully developed, the area could deliver production of 60,000 bpd.