-major shareholder Frontera optimistic on find
After searching for more than 22 years, Canadian oil explorer, CGX has struck oil in commercial quantities at the Kawa-1 well offshore the Corentyne.
Trading of the company’s stock on the Toronto Stock Exchange under the symbol “OYL” was halted this afternoon, usually a sign of an impending material announcement.
According to sources, the company informed the Guyana Government and an announcement of the find will soon be made public.
TORONTO, Jan. 31, 2022 /CNW/ – CGX Energy Inc. (TSXV: OYL) (“CGX”) and Frontera Energy Corporation (TSX: FEC) (“Frontera”), the majority shareholder of CGX and joint venture (the “Joint Venture”) partner of CGX in the Petroleum Prospecting License for the Corentyne block offshore Guyana, today announced that the Joint Venture has made a discovery at the Kawa-1 well, in the Corentyne Block.
Gabriel de Alba, Chairman of Frontera’s Board of Directors and Co-Chairman of CGX’s Board of Directors, commented:
“Initial results from the Kawa-1 well are positive and reinforce CGX and Frontera’s belief in the potentially transformational opportunity our investments and interests in Guyana present for our companies and the country. Kawa-1 results add to the growing success story unfolding in offshore Guyana as the country emerges as a global oil and gas exploration hotspot. On behalf of the Joint Venture, I’d like to thank the Government of Guyana for its long-standing support as we worked together to deliver this successful outcome.”
The Kawa-1 well encountered approximately 177 feet (54 metres) of hydrocarbon-bearing reservoirs within Maastrichtian, Campanian and Santonian horizons based on initial evaluation of Logging While Drilling (LWD) data. These intervals are similar in age and can be correlated using regional seismic data to recent successes in Block 58 in Suriname and Stabroek Block in Guyana. The well also encountered hydrocarbon bearing sands in deeper strata (Coniacian or older) which will also be analyzed and could become the target of future appraisal opportunities. The net pay and fluid properties of the hydrocarbons across the shallow and deep reservoirs will now be confirmed with electric wireline logging and fluid sampling, with results to be disclosed as soon as practicable.
The Kawa-1 well was drilled to a depth of 21,578 feet (6,578 metres) and targeted the easternmost Campanian and Santonian channel/lobe complex on the northern section of the Corentyne block.
CGX is currently assessing several strategic opportunities to obtain additional financing to meet the costs of the longer than expected drilling program.
Professor Suresh Narine, Executive Co-Chairman of CGX’s Board of Directors, commented:
“Results from the Kawa-1 well represents a positive milestone in the CGX journey as a pioneer oil and gas explorer in the Guyana Basin. Together with our partner Frontera, CGX looks forward to continuing our socially and environmentally conscious approach to development of Guyana’s oil and gas industry and port infrastructure. We are proud of our long partnership with the Government and People of Guyana and of our reputation as Guyana’s Indigenous Oil Company.”
Orlando Cabrales, Chief Executive Officer of Frontera, commented:
“We are very pleased to have successfully drilled the Kawa-1 well with our partner CGX. I commend the significant effort of all the talented employees and contractors involved and their dedication to helping this partnership achieve this important milestone. We now have an ability to focus our efforts on potentially transformational opportunities and to continue our positive relationship with the government and people of Guyana.”
Second Exploration Well to be Drilled on Corentyne
The Joint Venture has exercised its option to use the Maersk Discoverer semi-submersible mobile drilling rig for the Wei-1 well. This is an important step from a health and safety, efficiency, and operational perspective and will maintain continuity in the exploration program during a period of high demand in the region and consistency in working with a team familiar with the rig.
The Wei-1 exploration well will target Campanian and Santonian aged stacked channels in the western fan complex in the northern section of the Corentyne block. The Wei-1 well is named after one of the tallest peaks in the Pakaraima mountain range, which has commanding visibility over the surrounding terrain. Wei Tepu was historically used as a sentinel post by the Patamona People to guard against attacks.
Comments
This is good news! It is now conceivable that Guyana’s offshore oil reserves approach 20 billion barrels of oil equivalents. Furthermore, Guyana’s oil production and exports will no longer be completely dependent on Exxon and its partners. The bigger question relates to the Production Sharing Agreement that has or will be signed with CGX and Frontera. Tax exemptions have to be limited to a maximum of 10 years and liabilities for oil spills have to be met by the parent company. In the present case, both companies are however small in comparison to Exxon, hence liability has to be covered by insurances. Will the government learn from past mistakes?
I think my buddy might be in line for a small piece of this pie, at least I hope so, if there is any left over.
This oil don’t mean anything for we Guyanese except for large mansions, buildings and Lamborghinis for the 1%.