Canadian Overseas Petroleum plunges after a covenant warning

Canadian Overseas Petroleum Ltd. (COPL), has warned that it must raise funds before March 31st, following disruptions to operations at its Wyoming and Barron Flats Shannon units (BFSU). Production was stopped in 2023.

BFSU production was not re-started until 30 January 2023. COPL stated that as a result, its US affiliate may not be able to meet the upcoming covenants of its senior credit facility unless it secures new financing.

COPL stated that it doesn’t have enough working capital to meet its current needs and will require additional financing by March 2023 in order for it continue trading.

COPL said it is working with its advisors to obtain a senior debt facility prior to that time.

According to the company, it is actively negotiating additional 2025 bonds and warrants in order to issue a second tranche Winter Bond financing. This will be completed in February 2023 to meet its short-term capital needs.

The shares fell 66% to 5.55p