A year after receiving a warning from the Guyana Securities Council (GSC) to desist from trading shares here, oil and gas company G.G.C Resources Inc. is again under scrutiny.
The Guyana Geology and Mines Commission (GGMC) last Sunday placed a notice in the Sunday Stabroek in which it asked the principals of the company to make contact with the agency.
A reliable source at the GGMC, which is the regulator for the extractive sector, explained to this newspaper that the notice was placed at the behest of the GSC. “We have to do our own due diligence. The Securities Council has been trying to get information on them and they came to us and we wrote to CGX and said we are trying to find these people. You have a company trading so many shares but somebody who is interested would want to know who you are, who are the people behind the company and they should be able to find you but can’t,” one official, who did not want to be named, explained.
The ad stated that the company has until Monday to contact the GGMC, although it did not state what would
happen if it failed to do so.
“The principals of the company G.G.C Resources Inc. with last stated contact address 505 Park Avenue, 9th Floor, New York, 10022, USA are requested to make urgent contact with the Commissioner (Ag) at the particulars below, before June 3rd, 2019,” the GGMC notice stated.
Last year March, under the signature of Corporate Secretary Shaun O. Allicock, the GSC ordered GGC Resources, a shareholder in ON Energy Inc., to “immediately cease and desist from trading or transferring the 63,810,000 shares held in its name, of ON Energy Inc. a registered reporting issuer of GSC.”
It also invited G.G.C Resources Inc. to a hearing.
The notice to cease trading was issued one month after, in a similar notice, the GSC had announced that as part of its due diligence it was seeking any information the public may have on the company.
The GSC had informed then that the company is a 30.11% shareholder of ON Energy Inc, a subsidiary of Canadian oil company CGX Inc.
CGX, which has an office on Lamaha Street in Georgetown, has been engaged in oil exploration here since 2000. ON Energy has a number of local shareholders.
Last December, CGX announced that, subject to approval by the Toronto Stock Exchange (TSX), it had settled its debt to majority shareholder, Frontera Energy Corporation, through the sale of a percentage of its common shares. The two companies entered into a debt settlement agreement with respect to US$1,200,000 owed to Frontera by CGX. The debt was to be settled through the issuance of 5,714,285 common shares of CGX at a rate of US$0.21 per Common Share and meant that Frontera, therefore, could in the near future own 61.5% of CGX.
CGX, which did not have sufficient cash to repay its debt, offered the shares at a 25% discount to the closing price of the Common Shares on the TSX Venture Exchange (the “TSXV”) on December 14th, 2018.
CGX previously announced that subject to approval from the Government of Guyana it has entered into a farm-in joint venture (JV) agreement with Frontera.
According to that agreement, Frontera would acquire a 33.33% working interest in two blocks owned by CGX in exchange for a US$33.3 million signing bonus. Additionally Frontera agreed to pay one-third of the applicable costs plus an additional 8.333% of CGX’s direct drilling costs for the initial exploratory commitment wells in the two blocks while CGX would remain the operator with assistance from Frontera.
CGX has explained that the Debt Settlement like the JV agreement was a step that CGX is seeking to undertake in order to restructure its liabilities and provide for sufficient working capital to enable it to advance its offshore exploration projects in Guyana.
CGX, under a renegotiated work plan with the Guyana Government, has undertaken to drill the Utakwaaka-1 well by November 27th, 2019, acquire additional seismic or conduct seismic reprocessing by November 27th, 2020 and drill another exploration well by November 27th, 2022.
