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Regional News

August 29, 2010
CGX to drill for oil next year
Guyana Chronicle

Although there will be significant drilling activity in the offshore oil wells between Guyana and Suriname starting from October, the Canadian-based CGX Energy Inc. will commence its drilling in a one billion barrel resource potential during the second quarter of 2011, having raised US$20 million on the stock exchange at a price of US$0.50 per share.

In an interview with Juan Castello of the Wall Street Reporter, President and CEO of CGX Energy Inc. Mr. Kerry Sully said the chances for successful drilling are between ‘one in five’ and ‘one in six’.

According to Sully, the first well that CGX Energy Inc intends to drill will be in the Jaguar Field, with another being drilled coming afterwards.

Repsol YPF with 45 percent and Tullow with 30 percent will partner with CGX with 25 percent for the drilling of the Georgetown Concession.

Of the one billion barrel potential that the Jaguar spot holds, CGX Energy Inc.’s share is 250 million barrels.

Sully told Castello that the company has identified 16 prospects and leads in the Georgetown Licence.

He said the prospects are all “drillable” with potential for 300 million barrels of oil.

Sully explained that the prospects are those on which Seismic work has been done and the leads are those sites which are yet to have the seismic probe done on them.

“In each of these prospects and leads we have resource estimates greater than 300 million barrels. That’s a big number. Through the period 2006 and 2008 there were only 18 fields found worldwide that had greater than 300 million barrels,” he said.

CGX issued 40,000,000 common shares of the Company for gross proceeds of US$20 million.

In a press release on August 17, Sully stated: “We’re pleased with the support from existing and new shareholders. The funds will be utilised to fund our 25 percent share of the costs associated with the drilling of the Jaguar well on our Georgetown License and to fund the preparatory expenses for the drilling of an exploration well on our Corentyne Licence.”

Sully believes the offshore region of Guyana and Suriname is now becoming one of the most attractive basins in the world. He said because of the mishap in the Gulf of Mexico, persons may be looking for opportunities in other places.

CGX holds three licences offshore Guyana stretching 400 km from the Venezuelan border in the north to the Surinamese border in the south.

Using 2-D seismic, CGX has identified with five giant targets offshore and undertook a 2,375 sq km 3-D seismic programme on its offshore Corentyne and Georgetown licenses.

An independent report from Gustavson Associates showed CGX held a resource estimate of 2.8 billion barrels on three prospects on the Corentyne Concession.

In 2000, Surinamese gunboats booted the CGX oil rig from its drill site and this set off a barrage of diplomatic and other efforts aimed at resolving the matter.

Suriname insisted that the place that CGX had intended to drill was its territory and maintained this position despite a number of meetings held around Caricom. But in September 2007, the Hamburg-based United Nations International Arbitral Tribunal on the Law of the Sea announced its decision and made an award that found favour with the Government of Guyana and CGX Energy Inc, which paid Guyana’s legal fees in the fight.

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