Canadian Overseas Petroleum Limited and its affiliates announced the first oil production from the Frontier 1 sands at its operated 100% WI Cole Creek Unit. In the last week of December, the Company initiated recompletion operations on the well 11-27-35n-77w to evaluate the light oil potential of the Frontier 1 reservoir sands. Light oil was first identified in the Frontier 1 at Cole Creek in 1943 by the then operator General Petroleum Corporation, the operating affiliate of Standard Oil of New York (Mobil Oil).

The 11-27 Frontier 1 completion was the second completion attempt in the Frontier 1 in Cole Creeks history. The first attempt was in 1966 by Mobil and was unsuccessful. All well records available to the Company indicate moderate to severe fluid losses into the Frontier 1 during drilling and cementing operations at Cole Creek, and the areas to the east thus making Frontier 1 completions challenging.

This was the case the 11-27 well as well as 14-30-35n-76w exploration well of 2021. The lowest of three Frontier 1 sands was perforated with sixty-five feet (65') of perforations with no subsequent stimulation. Initial fluid recoveries were: black heavy degraded oil, black emulsion, minor brown un-gasified light oil and water.

In excess of 800 Bbl. of light fresh water drilling mud was lost into the formation during drilling 10.5 years ago, as well as cement during cementing operations. The well was then put on pump for clean up as it is the most cost-effective method to recover the invaded fluids and the resultant fresh water degraded crude oil from the near well bore area.

Fluid entry from the reservoir has remained constant through pumping at rates between 125-135 Bbls/d. Gasified light oil volumes increased over the last week with increasing oil cuts up to 86% at week's end, with the well slugging heavy black degraded oil, emulsion and drilling mud periodically at higher water cuts (up to 85%). The proportions of heavy black degraded oil, emulsion and drilling mud are decreasing as the well continues to clean up through pumping operations. COPL has opted to continue with the current process of well clean up rather than a hydrocarbon-based stimulation to remove the degraded oil and emulsion from the near well-bore area.

A stimulation of this type would remove the damage, though at a significant cost, monetary and time. Oil production from the Frontier 1 from the 11-27 well at Cole Creek will have an impact on the Company's petroleum resources through reclassification of Prospective Resources to Contingent Resources, and ultimately its Reserves as additional producing wells come online. COPL is continuing with its Cole Creek Frontier 1 recompletion program.

The second well in the program is 4-27-35n-77w. It is located approximately 0.5 miles northwest of 11-27 with the reservoir sands 230' higher in elevation. The lower Frontier 1 sand will be perforated with fifty-six feet (56') of perforations.

In common with 11-27, no stimulation of the perforations is planned. Reservoir quality from wire-line logs from 4-27 well appears to be better than the reservoir perforated at 11-27. Operations will commence when services required become available.

Cole Creek is an asymmetrical anticline approximately 9 miles in axial length with approximately 2,500 feet of structural/stratigraphic closure. Five known conventional oil reservoirs are present at Cole Creek: Lakota, Dakota, Frontier 2, Frontier 1 and the Shannon. COPL holds 100% WI in the Cole Creek Unit lease-hold on all rights below the Shannon.

Development of the Dakota and Shannon commenced in 1937 extending to the mid 1950's. Frontier 2 development through 7 wells commenced 10 to 15 years ago.