Mr. Tom Richardson reports

CANADIAN OVERSEAS PETROLEUM LTD ANNOUNCES BUSINESS AND FINANCIAL PERFORMANCE UPDATE

Canadian Overseas Petroleum Ltd. has provided a business and financial performance update.

On Dec. 29, 2023, the company announced (i) that it had entered into a forbearance agreement with its senior credit facility lender, pursuant to which the senior credit facility lender agreed not to enforce certain rights and remedies that it might otherwise have until Feb. 29, 2024, as a result of the default(s) under the senior credit facility; (ii) an equity placing; and (iii) the appointment of a chief restructuring officer, all of which were intended to give the company time to consider strategic financing or sale alternatives.

On Jan. 10, 2024, the company announced, in response to shareholder queries, that, among other things, the company had concluded that the value of Canadian Overseas' assets were unlikely to be sufficient to cover the claims of the secured and unsecured creditors which then stood in excess of $130-million (U.S.) and that the company was in a precarious financial situation relating to its liquidity position.

On Jan. 16, the company closed a $2.5-million (U.S.) equity placing that was designed to give the company an opportunity to remain listed whilst it obtained an independent technical review of the assets, including possible near-term and medium-term cash flows from various different development strategies, approach investment banks with a view to obtaining indications as to the value of Canadian Overseas' assets and seek further financing. The preliminary results of the third party technical review have not changed the company's conclusions about the value of the company's assets.

During this period, given its liquidity constraints, the company has not been acquiring any propane or butane for injection. The average daily production has been for 2024 has been approximately 1,000 barrels of oil equivalent/day. Based off the most current cash flow projections, the company forecasts that its cash reserves will be fully depleted in the first week of March, 2024, and that the company will require additional financing to be able to continue operations beyond such date. The company has sought, and so far been unable to obtain, such additional financing.

The senior credit facility lender has indicated that it will not extend the forbearance period beyond Feb. 29, 2024. The company continues to consider strategic alternatives in light of the foregoing, including some form of formal insolvency protection that may or may not leave value in the company's common shares.

About Canadian Overseas Petroleum Ltd.

Canadian Overseas is an international oil and gas exploration, development and production company actively pursuing opportunities in the United States with operations in Converse county, Wyoming.

We seek Safe Harbor.