Geology & Prospectivity Report

In 1999, CGX Resources shot the first solid-state 2-D seismic in the basin. A turbidite fan prospect called Eagle was identified at 13,000 feet. In June 2000, while a jackup rig was setting up to drill the Eagle prospect, gunboats from Suriname arrived claiming the territory as theirs, forcing the rig off location. To salvage value from the investment in supplies, including the sunk mobilization and demobilization costs, the jackup was moved nearer to shore in undisputed waters to drill a low priority Cretaceous stratigraphic trap called Horseshoe. The well was drilled to 13,000 feet in 28 days, but was abandoned as a dry hole. Despite encountering over 6,000 feet of reservoir quality sand, there was no apparent seal to trap hydrocarbons.

Following the ITLOS Maritime Border resolution in September 2007, exploration of the offshore portion of the basin accelerated. During 2008, CGX Resources shot the first 3-D seismic program offshore Guyana covering 505 square kilometres to enhance the interpretation of a large stratigraphic trap in the Cretaceous. Processing and interpretation of the 3-D seismic program was completed in 2009.

As a result of the geophysical and geological collaboration, and comparison to the analogous West African discoveries, the new priority prospects are Upper and Lower Turonian sands at approximately 5,600 metres. These primary prospects are overlain by leads in the Campanian and the Maastrichtian horizons as well as an additional prospect in the Eocene (Eagle). The proposed well location is 5.6 kilometres south of the target chosen using 2-D in June 2000, and is 12.6 kilometres inside Guyana’s Maritime Boundary with Suriname.

Design of the drilling program is being finalized prior to tendering for a jackup drill rig. A Strategic Environmental Assessment for drilling has been approved by the Government.

The Petroleum Agreement has been amended four times. On November 30, 2002, the first renewal period of the Petroleum Agreement was granted which included the following re-negotiated work commitments:
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