CGX reports further progress

Nov 12, 2009 News

Canadian-based CGX Energy is moving towards drilling next year for oil offshore the Guyana-Suriname basin which has been identified as a major new frontier in the industry.
“We have reached a key transition point in CGX’s history, having identified and enhanced a number of substantial exploration prospects offshore Guyana,” said President and CEO of GGX energy, Kerry Sully.
The United States Geological Survey (USGS) has identified the Guyana-Suriname Basin as having the second highest resource potential after Greenland among unexplored oil basins in the world.
The USGS estimates mean recoverable oil reserves of 15.2 billion barrels and gas reserves of 42 trillion cubic feet.
CGX Energy Inc. is a Canada-based oil and gas exploration company focused on the exploration for oil in the Guyana basin and has so far invested US$52 million.
Sully, in a press statement, pointed out that his company has acquired interests in five Petroleum Prospecting Licences (PPL) covering 9.6 million acres (7.2 million acres net).
“We have gathered and re-interpreted the historic data on those PPL’s, participated in the first 2D solid-state seismic survey in the basin and initiated the first 3D seismic shot offshore Guyana
“The processing of the 3D survey is nearing completion and the prospects are very encouraging.”
The company is continuing to look for joint ventures and partnerships for exploration and development, Sully said.
In August, Sully had indicated a desire to start drilling for oil next year, saying the cost estimate to drill has been reduced significantly to below US$70 million from US$90 million.
He said that this was as a result of the industry-wide downturn, service sector price reductions and CGX’s rig sharing initiatives with other operators in the area.
The company reported that as of June 30 last, it “remains well financed with working capital of $18.3 million.”
Joint venture partners in the Georgetown PPL include the operator, Repsol (15%) and its subsidiary, YPF Guyana (30%), and Tullow Guyana BV (30%).
He noted that there has been very little offshore exploration here in the past 50 years and the challenge is to move from resource to reserves, estimated to be about 15.2 billion barrels of oil and 42 trillion cubic feet of natural gas.
Offshore Guyana is in a proven hydro carbon system and there is current “incredible activity” in the area, he said.
Big oil companies in the area include Shell, Exxon and Spanish-based Repsol.
CGX is managed by a team of experienced oil and gas and finance professionals from Canada, USA and the UK. CGX is financed internationally and has shareholders worldwide.
CGX Energy had operated in the waters until Surinamese gunboats expelled the company in 2000 and halted companies’ plans for the area.
This pushed Guyana to settle a long-standing dispute with Suriname.
In September 2007, the United Nations ruled in Guyana’s favour, and the country hailed the 2007 ruling, hoping it would draw back oil companies to tap reserves offshore and boost an economy that depends on the agriculture and mining industries.

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CGX reports further progress

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