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Onshore
| On Energy Inc. |
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Exploring
the 800,000 Acres Onshore Berbice Block
In 2003, we met with representatives from Staatsolie, Suriname's national
petroleum company. Staatsolie has had onshore production since 1982
at the Tambaredjo field, about 200 km east of our block. According
to its annual report, in 2002 at Tambaredjo Staatsolie: |
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Produced
5 million bbls of 15°-17° API |
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Had
operating costs of $3.24/bbl |
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Estimated
900 million bbls of oil-in-place of which 170 million bbls are recoverable |
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Encouraged
by our discussions with Staatsolie and field trips to our Berbice
Block in Guyana, we formed ON Energy Inc.: |
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Incorporated
in Guyana on September 10, 2003, under the Companies Act (1991) |
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Transferred
to ON the Licence rights in the 415,000-acre onshore and near shore
portion of the 3.8 million acre Corentyne Licence granted to CGX by
the Government of Guyana in 1998 |
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Acquired
the Licence rights to the adjoining 387,000 acres |
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Guyanese
investors acquired 38% of ON through an IPO that raised US$545,000 and a subsequent rights offering that raised an additional US$4.2 million through local investment. In addition to the transfer of the onshore block, CGX Energy invested US$4.6 million |
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Commencing in the fall of 2003, we acquired and re-interpreted regional aeromag data, obtained and interpreted results from 8,000 geochem samples which identified 22 leads covering 250 sq km and shot and interpreted 180 km of 2-D seismic |
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On May 25, 2005, CGX commenced drilling onshore with its Yakusari well which was drilled to a depth of 2,901 feet and abandoned. This well was followed by Hermitage which was drilled to a depthof 6,337 feet and encountered significant gas shows in the lower section of the hole, however it was abandoned due to poor reservoir rock quality and modest reservoir thickness. The final well, Albion, was drilled to a depth of 6,442 feet and was also abandoned after evaluation of petrophysical well logs. |
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ON Energy is currently evaluating farm-in requests by other operators to drill on its onshore acreage. |
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Compared
to Tambaredjo, we expect any hydrocarbons on our acreage would be
found in deeper fields resulting in: |
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Higher
API oil |
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Better
recovery factors |
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Higher
pricing |
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Lower
operating costs |
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But
higher costs for drilling deeper and transporting farther—likely
to a refinery in Trinidad |
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