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“Very focused” CGX says all major debts have been cleared
– deepwater, port, Corentyne block top of company agenda
By Alliyah Allicock
Kaieteur News – Having transferred majority of its interest in the Corentyne Block to its joint venture partner, Frontera Energy Corporation last year to cover its expenses, on Wednesday Chairman of CGX, Professor Suresh Narine announced that they have been able to clear up all major debts.
The Chairman made the announcement during day-two of the ongoing International Energy Conference and Expo which is being held at the Marriott Hotel. Professor Narine while giving the Conference an update of his company’s operations noted that having encountered some struggle in the past, CGX is now more focused than ever. The Chairman explained that small cap independent companies will always struggle for capitalization but that is the reality in today’s world and that it is the task of companies to build value along the investment chain and to focus.
“So what you have today is a very focused CGX, focused on the Corentyne block, even more focus on the northern section of the Corentyne block and focused on our infrastructure project, the Berbice Deepwater Port,” he stated.
He shared that CGX has now a very “cleaned up balance sheet”, adding: “It’s a very cleaned up balance sheet, we just concluded a form down with my good friend Orlando (Chief Executive Officer of Frontera Energy) where we clean up all of our major debts, we have carry on the Wei-1 well, we are coming off of a discovery and we have retained the highest working interest of any of the independent PPL holders. We see that as an important achievement for our shareholders. So it’s a very focused poised company to continue to unlock the value both in our exploration portfolio and our infrastructure portfolio,” Narine told the conference.
Chairman of CGX, Professor Suresh Narine yesterday delivery remarks at the International Energy Conference and Expo.
He had explained during a question-and-answer segment that his company held a significant amount of debt to Frontera Energy and that “very recently, we concluded a form down deal arrangement with Frontera where they increased their working interest in the Corentyne block to 68%, we decreased our working interest to 32% and in that process, we removed our debt and we acquired a carry for the Wei-1 well.”
In July last year, Kaieteur News had reported that as part of the new deal with Frontera, CGX explained it will transfer 29.73% of its participating interest in the Corentyne block to Frontera in exchange for Frontera funding the joint venture’s costs associated with the Wei-1 exploration well for up to US$130 million and up to an additional US$29 million of certain Kawa-1 exploration well, Wei-1 pre-drill, and other costs.
In addition, CGX has said that it shall assign an additional 4.94% of its participating interest in the Corentyne block to Frontera as consideration for the repayment of the outstanding principal amounts under two loans. They are the previously announced US$19 million convertible loan to CGX dated May 28, 2021, as amended, and the previously announced US$35 million convertible loan to CGX dated March 10, 2022, as amended, and a cash payment of US$3.8 million.
As a result of this new agreement, CGX will have a 32.00% participating interest and Frontera will have a 68.00% participating interest in the Corentyne block. CGX said it is in the process of obtaining a formal valuation for the Corentyne block in connection with the Agreement, in accordance with the Toronto Stock Exchange Venture Exchange requirements. This publication had also reported that following the announcement of the transfer of interest, Professor Narine had said his company is pleased to complete this farm-in agreement with Frontera, which enables CGX to strengthen its balance sheet and secure funding for the Wei-1 exploration well.
- Chairman of CGX, Corentyne Block, International Energy Conference and Expo, Professor, Suresh Narine
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