CGX Energy (TSXV: OYL) is close to going all-in on its Corentyne block, found offshore of Guyana. The company this morning, in conjunction with its joint venture partner Frontera Energy (TSX: FEC), indicated that it is focusing “exclusively” on exploration within this oil and gas block.
As part of this exclusive focus on exploration at Corentyne, the company has entered into an agreement in principle with the Government of Guyana to rid of both the Demerara and the Berbice blocks. The agreements are expected to lead to mutual termination agreements, which are yet to be defined.
The move is being made to allow “the people of Guyana to benefit from exploration activities under the stewardship of interested parties.” The company had previously indicated that it had no intention to conduct exploration on Demerara this year.
“The joint venture is moving ahead rapidly to advance our program and unlock the potential of the Corentyne block, for the benefit of all stakeholders. To do so required a collaborative effort to resolve outstanding commitments for the Demerara and Berbice blocks and we are appreciative of this agreement. We are also engaged with the Government of Guyana in a collaborative effort to maximise opportunities to unlock value for the Berbice Deep Water Port,” commented Suresh Narine, Co-Chairman of the company.
In connection with the focus on Corentyne, the firm this morning restated that the new exploration well, Wei-1, is to be spud in the third quarter of this year. The well is currently slated to be drilled 200 kilometres offshore of the coast of Guyana, and 14 kilometres west of the Kawa-1 well drilled by the firm last year.
The well is to be drilled in water depths of 583 metres, with drilling to go as deep as 6,248 metres. The exploration well is to target three stacked channels on the northern portion of the cell block. Financing measures for the planned drill program have yet to be announced.
Last month, the company confirmed it had encountered 228 feet, or 69 metres, of net pay across four horizons within the Kawa-1 well, with light oil and gas having been hit.
CGX Energy last traded at $1.17 on the TSX Venture.
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