CGX gets extension for start of drilling at Corentyne block

-seeks joint venture partner

Canadian oil exploration company CGX Energy Inc has announced that it now has until October 31 next year to begin drilling for oil on its Corentyne block.

Government early last week granted the five-month extension for the spud date deadline on the company’s Corentyne Petroleum Prospecting Licence (PPL). “The Government of Guyana granted approval of an extension on the spud date on the first commitment well from May 31, 2015 to October 31, 2015. The extension was required to ensure that the Hakuryu-12 rig will have sufficient time to arrive in Guyana prior to the commencement of the weather window,” the company said in a statement.

“The company deeply appreciates the co-operation of the Government of Guyana in granting to CGX Energy the spud date extension. The procuring of the Hakuryu-12 drilling rig along with this extension significantly enables the company to address its work obligations under the Corentyne PPL with confidence. CGX Energy, being one of the long standing operators in the basin, is delighted to affirm its continued commitment to Guyana and to exploration of the Guyana-Suriname Basin. The company’s current drilling obligations tangibly demonstrate this commitment, even as it is engaged in actively planning for the spudding of its next well within the Corentyne PPL within the revised timeframe,” co-chairman of CGX Professor Suresh Narine was quoted as saying.

The company is also looking for a joint venture partner. The statement said that at the company’s 100% owned Corentyne PPL located offshore Guyana, the reprocessing and merging of the existing seismic surveys is now complete. It said that CGX has a technical data room available at its Houston offices and is working towards farming out a portion of the Corentyne PPL to a joint venture partner.

“In addition to the completion of the seismic reprocessing of the Corentyne PPL, a full elastic seismic inversion and AVO (Amplitude Variation with Offset) has been completed and received from Vector Seismic Data Processing, Inc., which has contributed significantly to the risk assessment of the exploration prospects being considered for the next drilling campaign in the Corentyne PPL,” the company said.

It asserted that the results of the reprocessing have assisted in confirming and enhancing the geological assessment of the block. “The company has made this information available in its data room and potential joint venture partners are in the process of reviewing the data. While these AVO analysis and results are subject to the uncertainties associated with geophysical/geological modeling, the company is encouraged by the results and remains optimistic about a potential discovery of hydrocarbons in the basin,” the statement said.

“We are very pleased with the progress of all our activities thus far in 2014. We continue to work towards drilling our next offshore exploration well in Guyana and are still optimistic that a joint venture partner will be secured prior to drilling,” Dewi Jones, Chief Executive Officer of CGX was quoted as saying.

The company also said that it has sealed a rig agreement with Japan Drilling Co., Ltd. for the provision of rig services. Under the terms of the agreement, the company has procured the use of the jack-up drilling rig – the Hakuryu-12 rig. CGX said that in an effort to significantly reduce drilling costs, it has simultaneously entered into a rig sharing agreement with Teikoku Oil (Suriname) Co., Ltd., a wholly-owned subsidiary of INPEX Corporation, Japan’s largest oil and gas exploration and production company.

The Hakuryu-12 rig, which is owned by BOT Lease Co., Ltd., is currently under construction at the PPL Shipyard in Singapore and will be mobilised to the first drilling site after completion in January 2015. CGX Energy and INPEX have agreed that INPEX shall drill the first offshore well in Suriname in 2015, the statement said.

Demerara Block

Meanwhile, in relation to CGX’s Demerara Block, the statement said that the company has commenced the procurement process in order to complete its 2014 work commitments on its 100% owned offshore Demerara PPL. “The company continues to examine methods to reduce the costs associated with the Demerara PPL’s seismic survey and expects to be able to share these costs with other companies operating in the Guyana-Suriname basin,” the company said.

“The company currently has a number of initiatives that it is rigorously working on as it begins to fulfill its commitments in all three of its PPLs. The company continues to believe in the potential of the basin and the discovery of hydrocarbons and also reaffirms its commitment to the successful completion of its work programs,” Jones said.

Searching for oil here since 2000, CGX saw two of its wells failing to hit commercial oil in 2012 – one wholly-owned and the other as part of a consortium. The 100 per cent CGX owned Eagle well was abandoned in May 2012 after it was found to be dry. The company together with the other partners abandoned the Jaguar 1 well as a result of safety concerns.

Last year, facing a demand from its partners for US$15 million sunk in oil exploration, CGX announced that it was entering into a private placement to raise Cdn$35 million – Cdn$40 million and its fellow Canadian oil explorer Pacific Rubiales Energy Corp subsequently gained control of the company.

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