Oil exploration company CGX Energy Incorporated says it will now cost an estimated US$20M less to drill the key offshore Corentyne Eagle Deep Well and it says it is encouraged by the time and depth images and its initial interpretation of the conventional processing of its 3D seismic survey.
In a news release yesterday, the company, which has already indicated that it would begin drilling for oil in Guyana sometime next year, reported that as of June 30, 2009 it remains well-financed with working capital of $18.3 million.
Chief Executive Officer Kerry Sully was quoted as saying that the cost estimate to drill the Eagle Deep Well has been reduced significantly to below US$70M from US$90M as a result of the “industry wide downturn, service sector price reductions and CGX's rig sharing initiatives with other operators in the area.
He said too that as the seismic processing nears completion, the company plans to re-open its data room for potential joint venture partners who would fund drilling of a well. CGX has been hoping to find oil in commercial quantities in the Corentyne Basin since its first abortive attempt to drill in June 2000. Surinamese gunboats had chased away a rig it had hired sparking a protracted diplomatic row over access to the area. Guyana then took its case to the Hamburg, Germany-based International Tribunal on the Law of the Sea and secured a decision largely in its failure.
Vice President of exploration, Warren Workman, was quoted as saying yesterday that the conventional processing of its 3D program, the first shot of offshore Guyana is nearly complete.
We are encouraged by the time and depth images and our initial interpretation. Compared with the 2D, the 3D data is providing superior depth modeling, better detail at the prospect level, and identifying new leads,the statement said.
He said that by September, a Pre-stack Depth Migration of the 3D seismic to give a better image of the depth and geometry of targets would have been completed. To further enhance the interpretation of the images too, the company has retained international experts to extract technical attributes from the dataset. The statement said Data Modeling Inc from Calgary is using proprietary artificial intelligence in relation to the acoustic velocity of the rock layers.
CGX said during the first half of this year, the principle activity undertaken by the company has been the processing of the seismic data acquired on the 505 sq km 3D seismic survey on CGX's 100% owned Corentyne Petroleum Prospecting Licence (PPL) and on the 1,839 sq km 3D seismic survey on CGX's 25% George-town PPL. Joint Venture partners in the Georgetown PPL include the Operator, Repsol (15%) and its subsidiary, YPF Guyana (30%), and Tullow Guyana BV (30%).
During a visit to Guyana in May this year, CEO Sully told reporters that the company was already along in its plans to drill.
He has stated too that he was confident that they are going to take a drilling commitment to the government.
“We just don't know exactly where but that doesn't preclude us from working our way through things such as environmental approval to drill and trying to design a drill programme such that when our final decision is made that we can proceed on an opportune basis, Sully had said.