Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP, OTC:VELXF) (COPL), an international oil and gas exploration firm with operations in the US, increased its crude oil sales before royalties in the second quarter of 2023, averaging 1,103 barrels per day (bbls/d), up from 974 in the previous quarter.
This surge in sales contributed to a net petroleum revenue of US$5.6 million (£4.4 million), a slight rise from the US$5.2 million reported in the first quarter of 2023.
However, the realised sales price of oil dropped to US$71.75/bbl from US$74.94/bbl in the first quarter.
In terms of operational highlights, COPL successfully upgraded its gas-gathering system during the quarter.
The initiative aimed to alleviate restrictions at specific well sites, ensuring efficient gas recovery back to the plant and minimising gas flaring. The company confirmed that the system was commissioned as scheduled and was completed under budget in July 2023.
COPL reported a realised hedging gain of US$100,000 on its butane hedge contracts, a decrease from the US$500,000 in the previous quarter.
This change follows the company’s decision to restructure its hedge in December 2022, which led to the absence of crude oil hedge swap contracts in the first half of 2023.
The company’s operating netback stood at US$20.93/bbl before accounting for the realised gain on butane hedge contracts. This figure is an improvement from the US$17.19/bbl reported in the first quarter, primarily due to a reduction in operating expenses, which were US$6.98/bbl this quarter.
General and administrative expenses were reduced to US$1.9 million from US$2.3 million, with the group planning to introduce additional cost-saving measures in the upcoming quarters.
As of 30 June 2023, COPL’s cash position was reported at US$5.2 million, an increase from US$4 million at the end of 2022.
Read More: Canadian Overseas Petroleum increases crude oil sales in the second quarter