CGX to inject US$100M this year targeting second well

Feb 18, 2022 News

By Gary Eleazar

Kaieteur News – Canadian ‘wildcatters’ Frontera Energy and CGX Energy have announced plans to spend between C$110M and C$130M or up to US$100M this year on exploration activity , primarily to drill Wei-1, their second high impact exploration well in Guyana described by them as “the most exciting offshore basin in the world.”

Additionally, it is anticipated that they will spend a further C$10M or just over US$7M on Guyana
infrastructure to advance the Berbice Deepwater Port Project. The announcement was made by Joint Venture partner, Frontera Energy which noted that, “despite increasing industry-wide inflationary pressures, Frontera remains focused on maintaining its competitive cost structure with production and transportation costs remaining relatively unchanged year over year.”

Gabriel de Alba, Chairman of the Board of Directors, in making the announcement noted that, “Frontera’s 2022 capital programme optimises both capital efficiency and free cash flow after development capex (Capital Expenditure) in 2022 and beyond, builds on the significant progress the Company made in 2021 against its objectives and maintains a disciplined approach to spending in the face of increasing inflationary pressures.

One of CGX Energy’s directors speaking at the Guyana Energy Conference and Business Expo 2022, Suresh Narine.

Orlando Cabrales, Chief Executive Officer (CEO), Frontera, said, “we will capitalize on the sweet spots of our portfolio by investing in development facilities at VIM-1, drilling opportunities at the recently acquired PetroSud, assets development drilling at Quifa, exploration activities and maintenance and production integrity activities across our portfolio. This activity is also expected to create a platform for future growth in 2023 and beyond.”
The news by the Canadian based wildcatters comes on the heels of an announcement earlier this month that after a decade long search it has discovered oil in commercial quantities offshore Guyana in the Corentyne Offshore Oil Block.
At the time, the partners said the Kawa-1 well encountered approximately 177 feet (54 metres) of hydrocarbon-bearing reservoirs within Maastrichtian, Campanian and Santonian horizons based on initial evaluation of Logging While Drilling (LWD) data.
It was drilled to a depth of 21,578 feet (6,578 metres) and targeted the easternmost Campanian and Santonian channel/lobe complex on the northern section of the Corentyne Block.

Frontera and CGX were keen to note that the Kawa-1 results support the geological and geophysical models used while noting that they have helped de-risk equivalent targets in other parts of the Corentyne licence area. At the time, the partners did signal an intention to spud its second commitment well, called Wei-1, in the northwestern part of the Corentyne Block in the second half of 2022. They have since exercised their option to use the Maersk Discoverer semi-submersible mobile drilling rig for the Wei-1 well.
The partners were keen to note that this is an important step from a health and safety, efficiency, and operational perspective and will maintain both continuity in the exploration programme during a period of high demand in the region and consistency in working with a team familiar with the rig.
Kaieteur News understands that the Wei-1 exploration well, will target Campanian and Santonian aged stacked channels in the western fan complex in the northern section of the Corentyne Block. The Wei-1 well is named after one of the tallest peaks in the Pakaraima mountain range, which has commanding visibility over the surrounding terrain. Wei Tepu was historically used as a sentinel post by the Patamona people to guard against attacks.
It would be apposite to note that because of the fact that the Kawa-1 well took longer than anticipated to spud, the cost for the well was revised upwards to between US$115M and US $125M.