COPL – £3 million Common Share Offering

Calgary, Canada, August 17, 2018 – Canadian Overseas Petroleum Limited (the “Company”) (TSXV: XOP) (LSE: COPL), an international oil and gas exploration and development company, is pleased to announce a Common Share offering to raise gross proceeds of £3 million (US$ 3.8 million) (the “Placing”), pursuant to which the Company will issue 895,523,000 new common shares (“Placing Shares”) at a price of 0.335 pence per Placing Share.

 Management and certain insiders of the Company plan to subscribe for new common shares in the Company at the Placing Price (the “Subscription”). An announcement pertaining to the Subscription will be released by the Company in due course.

 Full details of the Placing will be included in the Prospectus to be filed with the UK Listing Authority (the “UKLA”), which is expected to be published prior to the end of August 2018.

 Use of proceeds

As at 30 June 2018, the Company had consolidated cash balances of US$1,736,000. The Company intends to use the net proceeds of the Placing to fund the Company’s on-going general and administrative expenses. This principally covers a full technical team including geologists, a geophysicist, reservoir engineers, a drilling engineer and in-house Counsel, which are approximately US$400,000 per month, as the Company seeks to progress its projects in West Africa. 

 Nigerian Development Project

The Company is continuing to progress the financing of its Nigerian development project and is responsible for 50% of the costs relating to Shoreline Canadian Overseas Petroleum Development Corporation’s commitment to invest funds in the form of an interest-free shareholder loan to be used for its 80% owned Essar Nigeria operations. In particular, to cover the near term work programme obligations, including drilling one well under Phase-1 of the OPL 226 Production Sharing Contract.  As previously announced the Company agreed to a project financing and offtake agreement term sheet, providing for a minimum US$30 million to a maximum of US$50 million Senior Secured Facility (the “Facility”). Once entered into, the Facility will provide funding for all production related expenditures following the drilling and testing of the initial production well to be drilled by Essar Nigeria on its 100% contracted interest in OPL 226.

 The Placing is subject to customary conditions and the receipt of required regulatory approvals, including the approval of the London Stock Exchange plc (the “LSE”) and the TSX Venture Exchange (the “TSX-V”).   Application will be made for the Placing Shares to be admitted to the Official List and to trading on the Main Market, following approval of the Prospectus by the UKLA.

 Mr. Arthur Millholland, President and CEO, commented: “The proceeds from the placing will be directed towards on-going general expenses, which covers our qualified technical team and in-house Counsel. In strengthening our balance sheet, we are able to continue to focus on securing a financing package for the highly prospective OPL 226 project offshore Nigeria. As previously announced we are in late stage discussions with an oil service group and we look forward to updating the market on this is due course.”