Frontera Energy Corporation and CGX Energy, joint venture partners in the Petroleum Prospecting Licence for the Corentyne block offshore Guyana on Wednesday announced that that CGX Resources Inc., has entered into an agreement with Maersk Drilling Holdings Singapore Pte. Ltd to drill the Kawa-1 well.
According to a statement by Frontera, Maersk, a subsidiary of The Drilling Company of 1972 A/S, has agreed to provide a semi-submersible drilling unit, the Maersk Discoverer, and associated services to drill the joint venture’s Kawa-1 well in the Corentyne block.
The joint venture partners are targeting an early third-quarter spud for the Kawa-1 well. In early March the company informed that the Kawa-1 prospect has been matured to a drill-ready status and well design is complete.
The primary target for the Kawa-1 well is a Santonian age, stratigraphic trap, interpreted to be analogous to the discoveries immediately to the east on Block 58 in Suriname. The Kawa-1 well is anticipated to be drilled to a total depth of approximately 6,500 meters in a water depth of approximately 370 meters.
Meanwhile, the statement noted that the Maersk Discoverer is a 6th generation semi-submersible mobile drilling unit capable of operating in 3,000 meters water depth. Its primary features are a 15,000 psi-rated well control system, a dual activity derrick, and a moored capability with dynamic positioning. “These features make it an excellent fit for the Kawa-1 well’s subsurface conditions, drilling requirements, and the water depth on location,” the statement informed.
It was also mentioned that apart from the drilling contract between CGX Resources and Maersk, Frontera anticipates entering into a separate Deed of Guarantee with Maersk for certain obligations in connection with the day rates under the drilling contract on behalf of CGX Resources, up to a maximum of $25 million, subject to a sliding scale mechanism in connection with payments made under the drilling contract.
Frontera and CGX anticipate entering into an agreement pursuant to which all amounts drawn under the Deed that are attributed to CGX Resources’ share of the Joint Venture costs, shall be guaranteed by CGX.
Frontera holds a direct working interest of 33.3% in both the offshore Corentyne and Demerara blocks, and together with CGX, shares ownership of 73.8%, resulting in a total consolidated working interest of 82.6% in the blocks.
The two partners commonly referred to as the “Joint Venture”, contracted McDaniel & Associates Consultants Ltd to conduct a resource evaluation of their concessions in the Guyana-Suriname basin. Frontera announced that McDaniel had identified 27 prospects in the Corentyne block and five in the Demerara block. A statement by the company noted that 64% of the fluid content considered for the prospects, was comprised of oil, 28% natural gas, and the remaining 8% as condensates.
CGX has drilled a number of wells here but has not struck oil in commercial quantities.
