CGX aiming to drill 1st well in 2nd half of 2021

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…exploration well to be drilled in 1100-foot-deep water

CGX Energy Incorporated, which has been given a November 2021 deadline to drill its first well in the Corentyne Block, has plans to drill its first well in the second quarter of this year.

This was revealed by Frontera Energy, CGX’s Joint Venture (JV) partner, which released an Independent Resource Evaluation that was ordered last year into the Corentyne and Demerara oil blocks offshore Guyana.

According to the companies, they are aiming to drill that first well, the Kawa-1 exploration well, in the second half of the year (July to December). It was explained that the well design has already been completed.

“Procurement of long lead items is in advanced stages and key technical staff have been recruited. The Joint Venture plans to spud the Kawa-1 exploration well during the second half of this year and expects to drill the well in a water depth of approximately 1,100 feet targeting the Campanian-Santonian-aged stratigraphic trap, interpreted to be analogous to the discoveries immediately to the east on Block 58 in Suriname.”

A map showing CGX and ExxonMobil Operations among others.

“Additional prospects and leads on the northern portion of Corentyne have been identified and are being matured by the Joint Venture. The Joint Venture continues to advance its exploration program in both the Corentyne and Demerara Blocks with well locations being selected by the Joint Venture,” the JV also said.

When it comes to the Demerara Block, the JV spoke of continuing its preparations for the Makarapan-1 exploration well. According to them, this well is an Aptian stratigraphic prospect. Other prospects in the block have been identified and are being matured.

The independent report the JV partners had commissioned had revealed that they are potentially sitting on 4.9 million Barrels of Oil Equivalent (BOE) in the Demerara and Corentyne, Guyana oil blocks.

However, the report had hastened to add that there is no certainty that the company can recover the oil or that it is even commercially viable. According to the report, there are a total of 32 prospects in the two blocks, inclusive of 27 in the Corentyne Block and five in the Demerara Block.

These prospects potentially have 4.940 million BOE un-risked and 884 million BOE in them. An unrisked prospect, however, is one where the volume of oil is predicted on the basis that everything goes as planned and the oil is commercially viable and recoverable. The report makes it clear that it cannot give such certainty.

Last year November, CGX Energy Incorporated had announced that the Government, following discussions on the drilling delays in the Corentyne oil block, had agreed to give CGX a one-year extension until November 27, 2021, by which time they are expected to commence drilling in the Corentyne Block.

Back in May 2019, the former Government had approved a Strategic Joint Venture between CGX Energy Inc and Frontera Energy Corporation to farm into two shallow-water offshore Petroleum Prospecting Licences for the Corentyne and Demerara Blocks – both of which are adjacent to ExxonMobil’s Stabroek Block, where multiple discoveries have been made.

The farm-in joint venture allowed Frontera to acquire a 33.333 per cent working interest in the two blocks. The agreement should have seen CGX’s Utakwaaka well in the Corentyne Block being drilled by November 27, 2019, with an additional exploration well being drilled by November 27, 2022.

In the Demerara Block, an exploration well was supposed to have been drilled by February 12, 2021, with a further exploration well being drilled by February 12, 2023. However, CGX is yet to drill a well in the Corentyne Block, something which the current Government has expressed concern over. This situation persists even as a number of new companies have expressed an interest in Guyana’s oil blocks.

Additionally, the company had also revealed its decision to relinquish 24.96 acres of land at the estuary of the Berbice River that was earmarked for its deepwater project, following negotiations with the Government of Guyana.