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CGX ready to drill oil well in Corentyne Block
…targets reservoir similar to nearby Suriname discoveries
Kaieteur News – Canadian based oil exploration company, CGX Energy Inc., has secured a semi-submersible drilling rig to spud its planned Kawa-1 exploration well in the Corentyne Block later this year.
The Maersk Discoverer semi-submersible oil exploration rig
The announcement was made yesterday by CGX and its joint venture partner in the block offshore Guyana — Frontera Energy Corporation.
It was disclosed at the time that the Kawa-1 well will be targeting a “Santonian age, stratigraphic trap,” interpreted to be similar to the discoveries made recently, immediately to the east on Block 58 in Suriname.
The rig—the Maersk Discoverer—was secured from Maersk Drilling Holdings Singapore Ltd. and is a column stabilised, semi-submersible drilling rig, said to be able to operate in water depths up to 10,000 feet (ft.).
The Kawa-1 well is anticipated to be drilled to a total depth of approximately 6,500 meters, in a water depth of approximately 370 meters.
The rig has been contracted for one firm well on the Corentyne Block along with another optional spud in the Demerara Block, according to the partners.
The companies said that the Deed of Guarantee is expected to be provided by Frontera by the end of May.
The funding for the exploration activity was recently secured through a loan that was provided by Frontera to CGX.
That company had announced that it had pledged its Guyana assets in order to secure the loan.
It was noted by the partners that the Deed of Guarantee relates to certain obligations in connection with the day rates under the Drilling Contract on behalf of CGX Resources, up to a maximum of US$25 million.
This, according to the joint venture partners, is subject to a sliding scale mechanism in connection with payments made under the Drilling Contract.
Frontera and CGX said that they anticipate entering into an agreement under which all amounts drawn under the Deed and stand as part of CGX’s share of the joint venture costs, shall be guaranteed by CGX.
Frontera’s Chief Executive Officer (CEO), Orlando Cabrales, at the time of the loan agreement had observed, “…our joint venture with CGX represents a significant growth opportunity for both companies and is rooted in a commitment to the Guyanese government to develop these world class assets with a focus on local engagement and the development of infrastructure.”
He said, “Completing the loan agreement with CGX is an important step forward and the joint venture remains firmly on track to spud its first offshore Guyana.”
Executive Co-Chairman of CGX, Professor Suresh Narine, at the time of securing the loan remarked that, “We have exciting exploration plans for the Kawa-1 and Makarapan-1 wells on the Corentyne and Demerara Blocks and, as importantly, we are developing the infrastructure necessary to support and enhance broader energy and trade industry activity through the Berbice Deep-water Port Project.”
According to Professor Narine, the companies are looking forward to executing on their programs and creating value and opportunity for stakeholders.
Frontera has also announced that its first quarter results for the year will be released after the markets close on Wednesday, May 5, 2021, after which a conference call for investors and analysts will be held the following day.
Participants on that investor call are said to include Chairman of the Board of Directors, Gabriel de Alba; CEO, Cabrales; and Alejandro Piñeros, the Chief Financial Officer along with other select members of the senior management team.
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