CGX Energy Announces Filing of Third Quarter Financial Statements
Toronto, Ontario–(Newsfile Corp. – November 1, 2022) – CGX Energy Inc. (TSXV: OYL) (“CGX“or the”Company“) today announced the release of its unaudited consolidated financial statements for the third quarter of 2022, together with its MD&A – Quarterly Highlights (the “Financial Disclosures“). This financial information will be published on the Company’s website at www.cgxenergy.com and on SEDAR at www.sedar.com. All values in the financial information are in United States dollars, except otherwise indicated.
On July 22, 2022, CGX and Frontera Energy Corporation (“Border“) announced that the companies have entered into an agreement to amend the joint operating agreement originally signed between CGX and a subsidiary of Frontera on January 30, 2019, as amended, (the “JOA Amendment“) effectively cultivating the Corentyne block and securing financing for the Wei-1 well, subject to the satisfaction of certain conditions precedent. On October 3, 2022, CGX and Frontera announced that the parties had agreed to (i) extend the date of maturity of Frontera’s previously announced US$19 million convertible loan dated May 28, 2021, as amended, (the “Loan agreement“) to November 30, 2022; and (ii) amend the JOA Amendment to extend the deadline by which the conditions precedent to this agreement must be satisfied until November 30, 2022, as the joint venture continues to await the satisfaction of all the conditions Once all conditions precedent have been met, following the JOA Amendment, CGX will hold a 32.00% interest and Frontera will hold a 68.00% interest in the Corentyne block.
On May 9, 2022, Frontera and CGX, joint venture partners (the “joint venture“) in the Petroleum Prospecting Permit (“BVG“) for the Corentyne block, offshore Guyana, announced the discovery of 228 feet (“ft“) (69 meters (“m“)) of net production on the Maastrichtian, Campanian, Santonian and Coniacian horizons at the Kawa-1 exploration well, offshore Guyana. Third-party analyzes indicated the presence of light oil in the Santonian and Coniacian, and gas condensates in the Maastrichtian and Coniacian Campanian The results are consistent with findings reported by other operators adjacent to the Corentyne block and further reduce the risks of the equivalent oil targets planned at the Wei-1 well.
Berbice Deep Water Port
CGX continues to advance the deep water port of Berbice (“BDWP“) project, and to date has spent over $22 million on the BDWP project. The deep-sea port facility intends to serve as an offshore supply base for the oil and gas industry and base multi-purpose terminal cargo handling facility to service agricultural import/export, containerized and specialized cargo.The BDWP aims to enable the supply of operators and vendors in the territorial waters of Guyana and Suriname.The construction at the edge of the river is completed on approximately 500m of rock fill flood protection, a 10 acre dockside laydown yard built for a 5 ton/m2 bearing capacity, an access bridge to the main Corentyne highway and a 3.2 km access road, both built to American Association of State Highway and Transportation Officials (ASSHTO) standards, drains and concrete walkways for residents along the causeway and the extension of municipal water and electricity to the port site. In-river construction will start in the fourth quarter of 2022, with the construction of a 50 x 12 m access trestle from the quay yard to the west into the Berbice River, together with the necessary dredging of the river. This is intended to be followed by the construction of the quay, perpendicular to the trestle. The company began installing solar lights along the bridge, causeway and quay yard in October 2022. The port’s offshore supply base will not be fully operational in Q4 2022 as planned, due the need to revise designs to achieve cost savings. A revised execution schedule is being discussed with the contractor. The project now targets operation of the cargo terminal aspects of BDWP by mid-2023 and operation of the oil and gas support base by the end of 2023, subject to construction schedules and supply chains. ‘supply. Major infrastructure projects in Region 6 that have been announced by the Government of Guyana are driving the earlier completion of the freight aspects of the BDWP, particularly with respect to the handling of aggregates and other construction materials that must be imported into the region from elsewhere in the country and from abroad.
Abandonment of the Demerara and Berbice blocks
The joint venture and ON Energy Inc. (a 62% owned subsidiary of CGX) (“ON Energy“), respectively, began the process of abandoning the Demerara and Berbice Blocks through a Mutual Termination Agreement with the Government of Guyana, allowing the people of Guyana to benefit from exploration activities under the direction of the interested parties. On September 20, 2022, the Government of Guyana provided a deed of transfer to formalize the process After September 30, 2022, the joint venture and ON Energy, respectively, signed the deed of transfer of PPL Demerara and Berbice.
Due to unforeseen challenges for the exploration activities of a third-party operator, the delivery of the NobleCorp Discoverer drilling unit to CGX has been delayed. This situation is beyond the joint venture’s reasonable control. CGX and Frontera have communicated the revised spud window for the Wei-1 well to the Government of Guyana; should now be between December 2022 and the end of January 2023, subject to the release of the platform by the third-party operator.
Final preparations are complete ahead of the drilling of the Wei-1 well on the Corentyne Block, following the discovery of light oil and condensate at the Kawa-1 well earlier this year. The Wei-1 well will be located approximately 14 km northwest of the Kawa-1 well in the Corentyne Block, approximately 200 km offshore of Georgetown, Guyana and will be drilled to a water depth of approximately 1,912 feet (583 m) for an expected total. depth of 20,500 feet (6,248 m). Wei-1 will target aged Maastrichtian, Campanian and Santonian stacked channels in a western channel complex in the northern part of the Corentyne block.
As described in the financial information, the arbitration involving CGX and Prospector PTE. ltd. was resolved initially in favor of Prospector. However, CGX is contesting the decision and it is unlikely to be resolved until later in 2023.
CGX is a Canada-based oil and gas exploration company focused on oil exploration in the Guyana-Suriname Basin and the development of a deepwater port in Berbice, Guyana.
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Cautionary and forward-looking statements:
This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that CGX believes or anticipate will or may occur in the future (including (but not limited to, statements regarding exploration and development plans and objectives regarding the Kawa-1 or Wei-1 well or the BDWP) are forward-looking statements. These forward-looking statements reflect CGX’s current expectations or beliefs based on information currently available to it. Forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those discussed in the forward-looking statements, and even if such actual results are achieved or substantially achieved, there can be no assurance that they will have the expected consequences or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among others: the need to obtain required regulatory approvals; the joint venture’s ability to successfully explore and develop offshore blocks, and finance exploration and development and the impact thereof on unanticipated costs and expenses; changes in equity and debt markets; perceptions of the outlook and outlook for the oil and gas industry in countries where the Company operates or has investments; and other risks disclosed under “Risk Factors” and elsewhere in the Company’s Annual Information Form dated May 5, 2021 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as required by applicable securities laws, CGX disclaims any intention or obligation to update any forward-looking statement, whether as a result of future or other new information, events or results. Although CGX believes that the assumptions inherent in the cautionary and forward-looking statements applicable to it are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be placed on such statements. because of the inherent uncertainty.
For further information: Please contact Todd Durkee, Vice President, Development, CGX, (832) 300-3200, www.cgxenergy.com
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