September 10, 2008

CGX back on oil search track - with better high-tech probe

Guyana Chronicle

Toronto-based CGX Energy Inc. yesterday formally announced it is resuming the search for crude oil deposits in partnership with another firm in a concession off the Guyana shore with a more modern high-tech programme.

In a statement received here, the company confirmed that a 3D (three-dimensional) seismic programme will begin late this month to better locate huge oil deposits previous surveys have indicated are in the concession bloc.

It said that YPF Guyana Ltd., a subsidiary of RepsolYPF, based in Spain and acting as operator of the venture, has awarded a 1,650 square kilometre 3D marine-seismic contract to Fugro-GeoTeam in the prospecting area.

CGX said its wholly-owned subsidiary CGX Resources Inc., holds a 25 percent interest in the prospecting area known as the Georgetown Petroleum Prospecting Licence (PPL).

CGX President and CEO, Mr. Kerry Sully, last October told an energy conference in Canada, "We're starting a new race and it's time to go forward."

Mr. Warren Workman, CGX Vice-President for Exploration, also told the Guyana Chronicle in a telephone interview then that the "plan is to shoot 3D seismic to clarify these targets to prepare for an exploration well that has the possibility of penetrating several targets with a single well bore."

Sully said in the statement issued yesterday that Fugro's seismic vessel 'R/V Geo Pacific' will begin activities towards the end of this month.

Sully was reported as saying that the CGX share of the combined programme will be an estimated US$15M which will be funded by CGX from existing working capital.

He added: "The combined programme will result in a 33 per cent saving per square kilometre to CGX through economies of shared mobilization and longer sailing lines on the previously announced Corentyne programme."

CGX also confirmed that the farm-out programme led by its agent Jeffries, Randall & Dewey of Houston, Texas, has been put on hold during the 3D seismic search period.

According to the statement, Sully said "significant interest" was generated in this joint venture in the concession off the Corentyne coast, but with the 3D seismic acquisition probe about to begin on the Corentyne and Georgetown PPLs, CGX has put the farm-out process on hold until the 3D seismic data has been received and preliminary interpretation completed.

In June, 2000, CGX was forced to halt a drilling programme it had started off the Corentyne coast after gunboats from the Suriname navy ordered the crew and hired rig out of the zone.

Suriname had long claimed part of the border region with Guyana as its territory and after high-level missions led by President Bharrat Jagdeo and then Foreign Minister Clement Rohee failed to convince the government of then President Jules Wijdenbosch to settle the dispute, Guyana took its case to the International Tribunal on the Law of the Sea.

The tribunal sitting in the Hague in the Netherlands, after almost three years of deliberations, last year handed down an award in Guyana's favour, preserving 93 per cent of the CGX Corentyne Licence as being in this country's territory.