Canadian oil exploration company, CGX Energy now expects to commence drilling here next year after earlier saying drilling could begin here in the latter part of this year.
The company has pushed back expected drill times a number of times. In a statement yesterday, the company said that the Jaguar well is planned to be drilled in the first half of 2011 to a total depth of approximately 6,500 metres and will test the Cretaceous Turonian formation as the primary target. “As a result of rig allotment amongst other operators in the Guyana Suriname Basin, CGX has adjusted its previous drilling plans for the Eagle well such that it will now be drilled immediately following the Jaguar well in the second quarter of 2011”, the statement said.
The company disclosed the information while announcing a US$65 million Short Form Prospectus Offering. The statement said that CGX intends to use the net proceeds of the Offering: to fund CGX’s 25% share of the Jaguar well on the Georgetown licence; to fund its 100% share of the Eagle well on the Corentyne licence; and for general corporate purposes.
“CGX has been pursuing a potential joint venture partner on its interests in the Georgetown and Corentyne licences offshore Guyana. A number of companies were contacted, with 13 companies entering into confidentiality agreements with CGX to gain access to the data rooms assembled by CGX in connection with the joint venture process. As a result of the process and discussions with interested parties, CGX believes it has received external technical affirmation of the merits of its prospects. Although the joint venture process remains open and discussions are ongoing with potential partners, CGX has elected to complete this offering to be able to secure a rig and other services for the drilling of its prospects in early 2011 in order to fulfil the exploration obligations on the company’s licences”, the statement said.
It pointed out that CGX’s partners for the Jaguar well, are Repsol Exploracion SA (15%), being the operator, YPF Guyana Limited (30%), and Tullow Guyana BV (30%). The Jaguar well is planned to be drilled in the first half of 2011 to a total depth of approximately 6,500 metres and will test the Cretaceous Turonian formation as the primary target. The Eagle well will now be drilled immediately following the Jaguar well in the second quarter of 2011. “In addition, since the Jaguar well will test the Cretaceous Turonian prospect at 6,500 metres, where success would effectively de-risk the Turonian prospect at the Eagle well, Eagle is now being targeted to just 3,300 metres to test the Tertiary Eocene trend at a cost of US$35 million. If the Jaguar well is successful, the Eagle drilling programme is being designed such that the well could be deepened to test the Turonian,” the company said.
CGX is managed by a team of oil and gas and finance professionals from Canada, USA and the UK and is financed internationally and has shareholders worldwide. The company has been wrapped up in the quest for oil here for nearly a decade.
In June 2000, its rig was chased out of Guyana’s waters by Suriname gunboats as it was about to embark on drilling a well in the most promising area. This led to a diplomatic crisis between Guyana and Suriname and years of futile talks. The deadlock was broken when Guyana took its case to the International Law of the Sea tribunal and secured a ruling largely in its favour in 2007. Since then expectations have been high over CGX resuming its oil search.
In November last year, the company’s president Kerry Sully told President Bharrat Jagdeo during a meeting that CGX would drill offshore of the Corentyne in the second half of this year. The meeting followed Jagdeo’s public statement earlier in November that the company needed to move beyond talk and on to drilling.
