Canadian oil exploration company CGX Energy Inc and Japanese company Teikoku Oil (Suriname) Co, have signed an agreement with Japan Drilling Co Ltd (JDC) to rent a rig to drill on CGX’s Corentyne Block next year.
In a statement, CGX said that it has entered into a binding letter of intent (LOI) with Teikoku Oil (Suriname) Co Ltd, a wholly-owned subsidiary of INPEX Corporation, and JDC, for use of the jack-up drilling rig known as the Hakuryu-12 rig. The LOI forms the basis of the definitive rig agreements between JDC and each of the members of the Rig Sharing Group.
“The members of the Rig Sharing Group are required to enter into definitive rig agreements with JDC in order to reduce mobilisation and demobilization costs. The Hakuryu-12 rig will be delivered to Trinidad between April 1, 2015 and May 1, 2015,” the statement said.
“This LOI represents the next step in drilling at our 100% owned Corentyne Block. Being a part of the Rig Sharing Group means that CGX Energy will benefit from significantly reduced mobilization and demobilization costs typically associated with offshore drilling. The Hakuryu-12 rig is a jack-up rig that fits the Company’s well design specifications,” Dewi Jones, Chief Executive Officer of CGX said.
Searching for oil here since 2000, CGX saw two of its wells failing to hit commercial oil in 2012 – one wholly-owned and the other as part of a consortium. The 100 per cent CGX owned Eagle well was abandoned in May 2012 after it was found to be dry. The company together with the other partners at the Jaguar 1 well abandoned this site for safety concerns.
Last year, facing a demand from its partners for US$15 million sunk in oil exploration, CGX announced that it was entering into a private placement to raise Cdn$35 million – Cdn$40 million which would have seen its fellow Canadian oil explorer Pacific Rubiales Energy Corp gaining as much as 70% of the shares in the company.
