A week after Canadian oil explorer CGX Energy Inc said that its management had determined that exploration drilling on the Corentyne Block offshore Guyana would not be prudent, the firm says that it is fully committed to drilling on the Corentyne Block by July 31 next year.
“We wish to confirm that CGX Energy sought and obtained an extension from the Government of Guyana to its drilling activities on the Corentyne Block so as to further assess the prospects on this block in light of the Exxon-Mobil Liza-1 discovery in the adjacent Stabroek Block and to allow us more time to use this information to secure a joint venture partner. CGX Energy is fully committed to drilling on the Corentyne Block within the new timeframe July 31, 2016 negotiated with the Government of Guyana. Contrary to certain media reports, CGX Energy has not shelved its exploration focus on the Corentyne Block or any of our other assets,” Dewi Jones, the Chief Executive Officer of CGX Energy was quoted as saying in an ad published in the daily newspapers on Sunday.
In the August 28 statement, which was reported on by Stabroek News, Jones had said, “Given the steep decline in oil prices that has persisted over the last ten months, CGX Energy and its Board of Directors have determined that exploration drilling on the Corentyne Block offshore Guyana would not be prudent.” CGX had also said that the termination of the rig sharing agreements and deferral of the associated costs will allow it to continue to search for a joint venture partner and it will continue to evaluate industry and market conditions over the next six months. The company also highlighted its cost cutting initiatives and revealed that it was in a precarious financial position.
In its latest statement, Suresh Narine, the co-chairman of the company, said ExxonMobil’s Liza-1 discovery on the Stabroek Block, offshore Guyana has been a significant event for both CGX Energy and Guyana. In addition, as a result of the recent drilling extension received on the Corentyne Block and the payment deferral arrangements obtained from Japan Drilling Co Ltd (JDC), CGX Energy has been afforded ample time to secure a joint venture partner, he said.
“We welcome JDC as a significant equity holder of CGX Energy. Whilst the sustained low oil prices continues to be a concern for CGX Energy and other exploration companies, the company continues to be excited about its future in the Guyana basin,” Narine was quoted as saying.
The statement said that in partnership with Pacific Exploration and Produc-tion Corp, CGX Energy continues to attract interest from potential joint venture partners. The company is working with Pacific to find a suitable partner to develop its offshore and onshore acreage in Guyana, including the Corentyne Block, the Demerara Block and the Berbice Block, the statement said.
It added that CGX along with Pacific will be attending the APPEX regional conference in November where it plans to market its acreage to institutional and strategic potential joint venture partners. The conference will allow CGX Energy to market its prospects to several large international exploration companies, the statement said.
It pointed out that CGX is not only engaged in oil exploration, but wholly owns a logistics yard and deep water harbour facility in Guyana, which it is actively developing.
According to the company, it continues to reaffirm its commitment to social responsibility initiatives in Guyana and recently committed $1.5 million to assisting with drainage in Georgetown, $1 million to Emancipation Day celebration activities in Guyana and $1.7 million to the provision of a new boat for the purpose of ferrying hinterland school children as part of President David Granger’s initiative for providing transportation for hinterland students to schools.
“The company continues to commit investments into the social fabric of Guyana as it envisions a long-term presence in Guyana both on activities related to exploration and in the development of its deep water harbour facilities,” the statement said.
CGX, originally, was supposed to drill by the end of October this year. The Government of Guyana in June had granted approved for CGX to extend its spud date deadlines on the Corentyne Block from October 31, 2015 to July 31, 2016 for the first commitment well and from November 27, 2016 to November 27, 2017 on the second commitment well.
The company, which has been engaged here since 2000 in the search for oil, also terminated its rig sharing agreements with JDC and Teikoku Oil (Suriname) Co Ltd (INPEX) and said that this will allow it to continue to seek a joint venture partner.
In August, it had disclosed that its ability to continue as a going concern is dependent on securing additional financing through issuing additional equity, debt instruments or the sale of its assets and/or to obtain a joint venture partner. “Given the company’s capital commitment requirements associated with its petroleum prospecting licenses and the aforementioned penalties, the company does not have sufficient cash flow to meet its operating requirements for the next twelve months,” the August 28 statement said.
