Two oil companies may be grappling over discovery

Oct 22, 2019 News

By Kiana Wilburg

Executives at CGX Resources Inc. and Frontera Energy are smiling from ear to ear since an oil discovery in a neighbouring block is believed to be overlapping into their Demerara block by some 20 percent.

Map showing location of the Joe discovery and how it extends into the CGX Demerara Block

This was noted in a report that was done by Hannam and Partners, a leading independent investment bank which provides specialist advice and access to capital to major companies.

The bank was hired by Eco Atlantic, a small Canadian company which has a 15 percent interest in the oil rich Orinduik Block. Hannam and Partners’ report focused on the second discovery on the Orinduik Block called Joe-1 and how it further de-risks exploration and development.

In doing this, the investment bank noted that the Joe prospect may extend onto the Demerara block, directly to the north of Orinduik, which is owned 67% by CGX and 33% by Frontera (Frontera’s stake in CGX means that it has a 78% economic interest in the block). The bank also said that the discovery potentially extends some 15-20% into CGX’s Demerara block. The extension of this block not only de-risks the Demerara block but also supports the recent change CGX made to its drilling programme.

Kaieteur News would have reported some weeks ago that CGX made an adjustment to its drilling programme considering the proximity of the Joe discovery. In fact, CGX is drilling its first well on the Demerara Block in 2020, putting it one year ahead of its drilling schedule.
Also in 2020, CGX would be spudding its wild cat for the Corentyne Block following further forensic seismic investigation of the northern region of the block.

It would appear that this seismic survey is being done to gain a better understanding of the block’s geological systems and how those correlate with two nearby finds in the ExxonMobil operated Stabroek Block.

A perusal of the locations of Exxon discoveries show that the Pluma well is just two miles away from CGX’s Corentyne block while the Haimara is sitting a mere five miles away. The Pluma-1 well is estimated to hold at least 300M barrels of oil says Wood Mackenzie. Haimara-1 is part of trio oil field and potentially holds 800M barrels of oil equivalent reserves.

Furthermore, this newspaper understands that CGX would be utilizing the services of PGS Geophysical SA (“PGS”) to provide acquisition and processing of the 3D seismic survey covering approximately 582 km2 of the northern portion of the Corentyne Block. The survey is expected to commence in mid-October 2019 and be completed by November 27, 2019. This is in line with CRI’s re-sequenced work plan on the Corentyne Block, which requires it to complete a seismic survey by November 27, 2019 and the drilling of an exploration well by November 2020.

This newspaper understands that PGS plans to use an integrated acquisition and imaging approach, for reliable operation and fast turnaround of the seismic data. A Ramform Titan-class seismic vessel will be used to complete the acquisition, ensuring a high level of safety and operational reliability. In addition to this, GeoStreamer acquisition technology will enable advanced imaging techniques to provide structural imaging to support drilling decisions.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News