The shares of the Calgary, Alberta-based Canadian Overseas Petroleum (LON:COPL) group have been a strong performer today, leapingup 47% at one stage.
There are no corporate announcements out to spur such a price reaction.
However, over the last few months the group’s value has more than halved in response to market comment about the heavy operating costs.
Two weeks ago, along with some Board Changes, the company announced that it had put into place some annual general and administrative cost reductions, to the value of $1m.
The group has stated that its cost reductions are being implemented and, will continue to be evaluated across COPL's business, to align the company's resources with its focus on its oil production and development operations in Wyoming, USA.
Its interests
The £14.3m capitalised group is engaged in the exploration, appraisal, development and production of oil and gas assets with producing assets and reserves, principally in the Converse and Natrona Counties in the US state of Wyoming, where it is the operator and majority working interest owner of three oil producing units.
The company operates the Cole Creek Unit 100% WI, Barron Flats Shannon (Miscible) Unit 85% WI and holds Barron Flats Federal (Deep) 85% WI in addition to non-unitized lands 100% WI.
Its Wyoming operations are one of the most environmentally responsible, with minimal gas flaring and methane emissions, combined with electricity sourced from a neighbouring wind farm to power production facilities.
The ‘game changer’
Last December the group declared a ‘game changer’ at its Frontier 1 oil reservoir in Wyoming.
Oil production started in January before severe winter storms impacted to slow operations.
Conclusion – shares were oversold
The instant reaction to this substantial price rise today is that the group’s shares had been oversold and were now being reassessed in the light of the cost reductions being put in place.
Heavy trading in the stock is said to have been centred around some spread trading over the last week or so.
They now stand at around 2.65p, on the back of over 43m traded by lunchtime, some four times the daily average volume.
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