CGX Energy Inc is moving on to other locations in its hunt for oil after drilling at the Eagle-1 location in the Corentyne Basin proved to be futile, with the company now having to raise an additional US$20 million to finance the added drilling days spent at that site.
“CGX Energy Inc announces the results of the drilling of the Eagle 1 well on the Company’s 100% owned and operated Corentyne Petroleum Prospecting License (“PPL”), offshore Guyana. The Eagle-1 well reached total depth of 4,328 metres on April 25 in the upper Cretaceous Maastrictian geologic zone on an 8 ½ inch diameter hole and with synthetic oil based mud drilling fluid,” the release said.
It said that during drilling, the Eagle-1 well encountered oil and gas shows through the objective Eocene and Maastrichtian geologic zones and at the, yet to be confirmed, Oligocene zone indicating an active petroleum system where generated hydrocarbons have migrated through the pre-Miocene section drilled by the well.
The company in its release said that after combinable magnetic resonance and modular formation dynamics were run, it was determined that while there was a presence of good quality sandstone reservoirs, they “unfortunately” proved to be water bearing. “Further analyses will be conducted to verify the geological age of the drilled section as well as the chemical composition of the recovered fluids,” the company said.
CGX said that the Eagle-1 well was initially budgeted for 60 days of drilling but experienced weather delays and mechanical issues which extended operations for approximately an additional 30 days.
“The initial cost estimate for the Eagle-1 well was US$55 million, however with the delays the Eagle-1 well is now estimated to cost US$71 million.
As a result, the company will need to raise approximately US$20 million in the near term,” the press release said.
Kerry Sully, President and CEO, stated, “Although the results of the Eagle-1 well are disappointing for all stakeholders, this test has gathered valuable information that will assist CGX with determining the drilling location for its next well to be drilled on the Corentyne PPL and for other future targets.”
Sully said that the company’s geosciences team has been interpreting the recently acquired 3D and additional prospects have been identified. “In addition, the team has established that the up-dip termination of our Eagle Deep Turonian prospect is at a shallower depth than originally anticipated. Now that the Eagle-1 well has finished drilling and in response to expressions of interest, CGX is re-opening the data room to re-start the joint venture process,” he said.
The release noted that the Jaguar-1 well on the Georgetown PPL in which CGX has a 25 per cent interest with partners Repsol Exploración SA (operator), YPF Guyana Limited and Tullow plc, continues. The total depth for the well is projected at 6,500 metres to test the Turonian geologic zone. The Jaguar-1 well commenced drilling on February 9, 2012 and is expected to take 180 days.
It said that here, drilling operations are progressing as planned.
