Georgetown: Canadian oil and gas exploration company CGX Energy said, with the recent oil discovery made by its counterpart United States
(US) based oil company Exxon Mobil, it will now be moving quickly to determine how best it could develop its acreage given its current financial constraints.
The company’s Chief Executive Officer Dewi Jones, in an announcement late last week disclosing its 2015 first quarter financial statements, said, “We are encouraged by the recent announcement by ExxonMobil in connection with its ‘significant discovery on the Stabroek Block’ located approximately 120 miles offshore Guyana and immediately adjacent to our acreage.” The company’s licences in Guyana covers some 3.3 million acres gross and 3.0 million acres net.
The discovery by Exxon Mobil has somehow given CGX some hope of finding oil in Guyana since after being here for a number of years and carrying out a few drilling activities, has came up empty handed.
Of all the companies operating in the country, CGX Energy is said to be the most exposed. The company’s entire portfolio is focused on Guyana, in both the onshore and offshore basins. Onshore, the company holds a majority stake in the Berbice Block, through the ON Energy joint venture, owned 62.5 per cent by CGX Energy and 37.5 per cent by local investors. However, exploration results on the block have been disappointing, with three dry holes drilled in 2005. Moving offshore, it has a 100 per cent stake in three offshore blocks, Corentyne, Corentyne Annex and Pomeroon.
In 2012, CGX participated in two offshore wells – the Eagle-1 well was drilled on the Corentyne Licence and the Jaguar-1 well was drilled on the Georgetown Licence. The Eagle-1 well had oil and gas, and the Jaguar-1 well sampled light oil in two zones. Both wells were abandoned. Eagle-1 as a dry hole and Jaguar-1 for safety concerns.
On February 12, 2013, CGX announced that the Government of Guyana issued a new Demerara petroleum agreement and petroleum prospecting licence in offshore Guyana, which encompasses the former Annex Licence as well as a new Berbice petroleum agreement and prospecting license onshore Guyana. This combines the former Berbice Licence and former onshore portion of the Corentyne Licence. Both licenses are renewable after four years for up to ten years.
Meanwhile in its financial results, the company has recorded a net loss of US$837,278 or US$0.01 a share for the three month period ended March 31, 2015, compared with US$1,185,644 or US$0.02 a share for the same period in 2014.
In its cost cutting initiatives, it reported that general and administrative costs increased slightly to US$447,593 in the three month period ended March 31, 2015 from US$436,269 for the same period in 2014. These lower costs are consistent with the prior year and are a continued result of an overall cost cutting initiative undertaken by the company in the latter half of 2013, driven by the reduction in non-essential staff and purchases. In addition, management and consulting fees decreased to US$502,667 during the three month period ended March 31, 2015 compared to US$543,988 for the same period in 2014.
The company said it continues to seek a joint venture partnership for all three of its petroleum prospecting licences and is actively pursuing this initiative. In the short term the company will require additional financing and seek to widen its shareholder base, but still with a view of negotiating far out transactions as the primary way to enhance shareholder value.
Subsequent to March 31, 2015, the company received an invoice for its share relating to the mobilisation fee of approximately US$5.6 million under the definitive rig agreement with Japan Drilling Co Ltd, and related rig sharing agreement with Teikoku Oil (Suriname) Co Ltd, a wholly-owned subsidiary of Inpex Corporation, for the provision of rig services for the use of the jack-up drilling rig known as the “HAKURYU-12” rig. The Company is currently considering all of its available options under this agreement.
CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin.
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