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CGX Energy Inc V.OYL

Alternate Symbol(s):  CGXEF

CGX Energy Inc. is a Canada-based oil and gas exploration company. The Company is focused on the exploration of oil in the Guyana-Suriname Basin and the development of a deep-water port in the Berbice, Guyana. The Company holds interests in three petrol prospecting licenses, such as Corentyne, Berbice, and Demerara Blocks in the Guyana Basin. The Company has drilled two operated exploration wells on its offshore Corentyne Block and drilled three more exploration wells on its onshore Berbice Block. In addition, it has acquired and processed over 7,000 square kilometers of three-dimensional (3D) seismic data on its offshore licenses. The Company through its wholly owned subsidiary, Grand Canal Industrial Estates Inc. The Company is engaged in the development of the Berbice Deep Water Port in Region 6, Guyana. Its other subsidiaries include CGX Resources Inc., ON Energy Inc., and others.


TSXV:OYL - Post by User

Comment by OIL_RUNon Sep 02, 2021 12:55pm
436 Views
Post# 33801146

RE:Valuation

RE:Valuation

If you are interested in running a valuation for CGX (exploration / prospect inventory) use the attached as a general template.


Generally, Kawa represents a 500mmboe sized prospect (based on recent Apache earnings call). Lot's of questions here as Kawa will penetrate three independent fans (campanian, upper Santonian, and lower Santonian).

 

500mmboe * .67% interest * $6.5/bbl (in the ground) = US $2.18B. 
 

When Apache announced its first several discoveries - Citi valued each discovery (supporting a large FPSO of 220k) between ~$3.5 to $4 per share (given their 50% interest in the block). 388 million shares out * $3.5 or $4 = worth they pegged a valuation of $1.36B to $1.55B. Or, ~$30M per 1% interest.


So, $30M * CGX's 67% interest = ~$2B. Both valuation run by Citi and Berenberg point to a similar valuation.


In addition, analysts will probably apply a de-risking assessment across the remaining un-drilled prospects within the northern Corentyne area. For this basin - I see analysts use $2/bbl. Say conservatively we are looking at another 2B of high quality undrilled prospects in northern Corentyne with risk at 40% PoS - $2/bbl * 2 billion * 40% PoS = ~$1.6B.



I don't know where you can up with the 50mmboe recoverable resource figure for Kawa - but, that is incorrect. The shallow campanian / maastrichtian discoveries made by Exxon are on average 300mmboe in size (recoverable resource). The deeper Santonian target is on average 500mmboe in size (recoverable resource).


Stacked pay across Kawa - might be a bigger number than what has been made public...


I am going to assume $8 base / low case for Kawa success and northern Corentyne de-risking. Second well success in Demerara probably gets us to $15 low case. 
 

Sit back - relax. This is the fun part. The hard part was getting here...

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