CGX today announced that the Government of Guyana has issued two new petroleum prospecting licences, one to CGX Resources Inc, a wholly owned subsidiary of CGX and one to ON Energy Inc (“ON Energy”), a 62% owned subsidiary of CGX.
CGX had announced the likelihood of these two licences on November 29 last year.
The Canadian explorer which has been seeking commercial oil here since 2000 said in a press release that both licences are effective as of February 12, 2013 and renewable after four years for up to ten years.
Two of the wells that CGX had an interest in failed to find oil in commercial quantities last year. Drilling on one had to be prematurely stopped for safety reasons.
CGX said that the new Demerara petroleum agreement (“Demerara PA”) and petroleum prospecting licence (“Demerara PPL”) relates to the former offshore portion of the Annex PPL, covering 3,975 square kilometres, which was a part of the Company’s original Corentyne Petroleum Agreement. CGX disclosed that under the terms of the new Demerara PA, and during the initial period of four years, CGX is obligated to undertake a 3D seismic survey over a minimum of 1,000 square kilometres and to sink one exploration well.
The new Berbice petroleum agreement (“Berbice PA”) and petroleum prospecting license (“Berbice PPL”) pertains to the former Berbice licence comprising 1,566 square kilometres (971 square kilometres net) and the former onshore portion of the Company’s original Corentyne Petroleum Agreement composed of 1,729 square kilometres (1,072 square kilometres net) for total onshore acreage of 3,295 square kilometres. Under the terms of the new Berbice PA and during the initial period of four years, CGX said that ON Energy is required to conduct an airborne survey over a minimum of 1,000 square kilometres and either conduct a 2D seismic survey comprising a minimum of 100 square kilometres or drill one exploration well.
The original announcement in November had said that two wells were mandated.
Kerry Sully, President and CEO, was quoted in the release as saying, “CGX has identified leads on the Demerara PA that will require 3D seismic to enhance to prospect status. The licence straddles a portion of the current continental shelf and is updip from a 3D seismic program recently shot by Exxon and Shell in the adjoining Stabroek PA. On the Berbice PA, the main exploration targets are stratigraphic traps similar to the Tambaredjo and Calcutta heavy-oil fields onshore Suriname. Staatsolie Maatschappij Suriname N.V. estimates original oil-in-place of more than a billion barrels in these fields, with remaining proved reserves at the end of 2011 of 77 million barrels after 30 years of production.”
Professor Suresh Narine, Executive Chairman, stated in the release that “The issuance of the new Demerara PPL and Berbice PPL by the Government of Guyana to CGX is a further endorsement of the important role CGX plays in a realization of the petroleum potential of the Guyana Suriname basin.”
CGX is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin.
