With just under a year remaining before the expiration of its prospecting licences, CGX Energy has been informed by the government that it is expected to drill exploration wells in the offshore Demerara and Berbice blocks.
As a result, CGX, which recently announced plans to focus on the Corentyne block this year to guide future activities, has said it will be seeking talks with the Natural Resources Ministry.
CGX and joint venture partner Frontera, which is its majority shareholder, on February 4, 2022, said it would be focusing on developing the Corentyne block this year due to the initial positive results at the now abandoned Kawa-1 exploration well and that it would not engage in drilling activities on the Demerara block in 2022.
CGX said in a statement last Wednesday that Minister of Natural Resources Vickram Bharrat on February 21 informed the joint venture that the two commitment exploration wells must be drilled on the Demerara block per the terms of the Demerara Petroleum Prospecting Licence and associated Petroleum Agreement prior to February 12, 2023. “CGX will seek further dialogue with the Ministry of Natural Resources regarding this guidance,” the company said.
Similarly, CGX noted that through its 62%-owned subsidiary, ON Energy Inc., it also notified the Ministry of Natural Resources that due to focus being placed on the Corentyne Block, operational considerations and investment priorities, it would be unable to drill an exploration well in the Berbice Block in 2022 and proposed that seismic acquisition on the block be shifted to commence in January 2023.
According to CGX, Bharrat in response said that he also expects ON Energy to drill one exploration well on the Berbice block and acquire seismic on the block prior to the expiry of the Berbice Petroleum Prospecting Licence and associated Petroleum Agreement. Once again, the company said it would seek further dialogue with the Ministry of Natural Resources on the matter.
Both the Demerara and Berbice prospecting licences, granted in February 2013, are set to expire next February.
‘Kawa abandoned’
Meanwhile, GGX also announced that the Kawa-1 well has been safely plugged and abandoned. Together with Frontera, CGX drilled the Kawa-1 well to a total depth of 21,578 feet (6,577 metres) in the northern section of the Corentyne block.
“Kawa-1 was a first stage exploration well intended to identify the presence of hydrocarbons, which occurred. The well was then decommissioned by way of safely plugging and abandoning it, a standard practice and planned event,” CGX said in a statement on Friday.
According to the statement, the Kawa-1 well was never intended to be kept active following completion of the successful drilling campaign, despite having never previously indicated that in past years. However, it said data gathered from the well along with the planned drilling of the Wei-1 well in the second quarter of this year will determine future development or appraisals in the Corentyne Block.
The Kawa-1 exploration well’s cost was pegged at US$141 million.
CGX announced in January that the Kawa-1 well encountered approximately 177 feet (54) meters) of hydrocarbon-bearing reservoirs within the Maastrichtian, Campanian and Santonian horizons while drilling was ongoing. In mid-February, CGX said successful wireline logging runs confirmed net pay of approximately 200 feet (61 metres) within Maastrichtian, Campanian, Santonian and Coniacian horizons.
While CGX announced the discovery, it never announced whether oil was struck in commercial quantities although preliminary results indicated the presence of light hydrocarbons, which was confirmed for the Santonian reservoir late last month, according to the Canadian company. However, the company said, those results are only preliminary.
Twelves cutting samples have been sent to an independent laboratory to determine the quality of the hydrocarbons. So far only the preliminary results of the Santonian reservoirs have been released.
For the four samples of cuttings from the Santonian intervals, a technique called the Low temperature Hydrous Pyrolysis (LTHP) was utilized to analyze the cuttings to preserve volatile hydrocarbons. Then High Resolution Gas Chromatography analyzed the LTHP mobilized hydrocarbons which has demonstrated a “reproducible” presence of light hydrocarbons, indicating that the Santonian reservoirs likely contains a light oil.
CGX says that further geochemical investigation of samples taken from the Santonian, Campanian and Maastrichtian intervals continue and will be communicated when fully analyzed.
Meanwhile, CGX notes that the Kawa-1 well results have improved its understanding of the operational and geological complexities of the basin and will help reduce the technical risks of the Wei-1 exploration well in the Corentyne block.
The joint venture has since begun the integration of detailed seismic and lithological analysis and pore pressure studies from the Kawa-1 into drilling preparations in advance spudding of t the Wei-1 exploration, which is expected to be spudded in the second half of 2022.
