UNITIZATION, PRODUCTION, & COST RECOVERYThis is perhaps why CGX is prioritizing shooting 3D seismic across the Northern Corentyne License and Duncan Nightingale has been appointed to serve on the CGX board (emphasis on reservoir mapping expertise). See below link: https://www.guyanastandard.com/2019/08/22/tullow-oil-to-recover-financial-benefits-from-exxons-hammerhead-discovery/ G
I would anticipate (over the near future) CGX will be engaging Tullow and the Orinduik interest holders regarding overlapping reservoirs of Joe - and the liklohood of forming a simple unitazation arrangement.
I would further suspect CGX will be engaging Exxon and the Stabroek interest holders regarding overlapping reservoirs of Pluma (among other reservoirs) - and the liklihood of forming a simple unitization arrangement.
Pending where Apache drills offshore Suriname - a similar discussion may need to be arranged....
Let’s not forget CGX has ~US $155M in cost recovery associated with the Corentyne license. It will be important CGX is able to include those costs as part of any future production that comes from reservoirs located within their respective licenses - including a unitization framework.
Assuming unitization is on the table, it would be a huge win for CGX and Frontera to create a unique financing arrangement (loan facility) as for both companies to participate in the future production scheme(s) of a unitized field development. Note, the CGX PSA’s provide for interest payments to also be cost recoverable.
very interesting times!