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CGX enters US$17.9M deal with UK prospector to conduct ‘3 D’ seismic survey
CGX Energy, a Canadian-based oil exploration company, says it is making progress in drilling another well.
The company has entered into a seismic contract with Prospector PTE. Ltd. to conduct a 3,116.74 kilometer square ‘3D’ seismic survey on its 100% owned Demerara Block, offshore Guyana.
The R/V BGP Prospector which will be conducting the ‘3D’ seismic.
According to CGX, the contract terms are attractive and represent one of the most extensive 3D seismic studies ever conducted in this area.
In total, it will cost US$17.9M for the seismic survey with 40%- approximately US$7M being paid to the prospector by way 15.5M common shares. The remainder will be paid in cash 12 months after the conclusion of the seismic survey.
According to CGX, prior to the agreement, Prospector did not own any common shares but the company will now own approximately 16.6% of the issued and outstanding common shares.
“The company expects the seismic survey to be completed within approximately 60 days following mobilization.”
Dewi Jones, Chief Executive Officer of the company, commented: “We are very pleased to have Prospector as a significant equity partner in the company. This transaction offers the company the opportunity to engage a world-class geophysical services firm while also preserving cash in the short-term.”
According to CGX, the Guyana-Suriname Basin is an exciting new frontier that has increasingly demonstrated the potential for hydrocarbons and is gaining significant international exploration attention.
Prospector will deploy their modern 12-streamer 3D seismic vessel, known as the “R/V BGP Prospector” that was specifically constructed for serving the high-end 3D, 4D and wide azimuth marine seismic survey market. The vessel is outfitted with ION’s DigiSTREAMER seismic data acquisition system.
The initial phase-1 work commitments are comprised of a 3D seismic survey consisting of a minimum of 1,000 km2 and the associated processing and interpretation.
“The 3D seismic survey will cover substantially all of the Demerara Block and will provide detailed information on the reservoir distribution and structural integrity of the current leads. Ultimately, this 3D seismic survey will allow CGX Energy to better rank its prospects in the Guyana-Suriname Basin and define future drilling locations.”
Prospector, according to CGX, is a marine seismic service company with state-of-the-art equipment and experienced crew, having rich operation experience in Africa and South America.
In May 2012, CGX announced that its drilling at the Eagle-1 well had failed to find oil in commercial quantity.
With a high fuel import bill, Guyana had been pinning its hopes on that well to be successful in the oil search. With all three of its neighbours- Suriname, Brazil and Venezuela- pumping oil, Guyana is more than heartened.
Another well, Jaguar-1, off Georgetown shores, being drilled by Spanish-owned, Repsol, had also failed. CGX had a 25 per cent interest with that initiative.
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