CGX Energy Inc V.OYL

Second well of the Discoverer ALSO on Corentyne...

[oldcompanyman]

Gents,

The second well that CGX have committed to drill with Maersk Drilling will apparently be also on the Corentyne block (this is what has been spoken about by some people at the logistics base in Guyana, I have no further information but it came from people I trust).

This is strange, given that they have a committment on the other block too, for February. The only possible explanation is them being very confident in Kawa-1 results and therefore already anticipating the appraisal well.

This doesn't change anything for our immediate future but makes me sleep even better for the coming 2 months.

GLTA,

[soulfire]

Thanks OCM. Is there any outside change being halfway down by now that they are already seeing signs of Hydrocarbon?

[oldcompanyman]

They may always see some hydrocarbons given that it's an area where HCs have been found and here and there they may drill through some HC-bearing layers while "en route" to the target reservoir, but they cannot be seeing any commercial hydrocarbons at their current depth because it would have been apparent on the seismic. So, in short, the information regarding the second well being

[jtdd]

I actually called that a while back. The rig is due to go back to Trinidad right after Kawa so there is no way it could drill the Demerara well by the February deadline. A while back, I said that they would probably drill the second well at the multi- stacked prospect in the corentyne to the north west of Kawa when the drill comes back from Trinidad. They will need to get an extension on Demerara.

[Rapsani]

If they drill 2 wells in Corentyne I would expect so another work committment change with the government agreeing, as they have in the past, so we do get an extension on Demera in lieue of exceeding committment on Corentyne.    Or maybe what they see in Demera isn't as good and are willing to relinqish it...   or a future JV partner said drill 2 where you are. 

[soulfire]

Rapsani I agree. If KAWA1 is a discovery I think the government will grant an extension for Demerara. Oil has a limited lifetime so the smart thing to do is capitalize on what's proven. We will have a JV. Maybe one is agreed to in principle already. Funny how CNOOC just raised funds and it coincides with CGX expiration of the Rights Offering. Our time to shine is upon us. GLTA

[ljmorin]

What about long lead items that may be required to carry on in Cor?

[oldcompanyman]

It's a legitimate question. Given that they have already anticipated drilling another well (i.e. the Demerara well as per the original plans), they will have issued the relevant PO's for qeuipment for this well and they can simply use these. The only problem I see with that approach is that Kawa is deeper than the prospects on Demerara so the casing strings, in particular the production

[OIL_RUN]

I can see merit to CGX drilling back to back exploration wells on the Northern Corentyne Area. However, I would suspect the well would be drilled to test the second major fan complex situated north-west of Kawa. As mentioned by others, the second exploration well on Corentyne would be in lieu of drilling on Demerara. They would need to seek agreement from the government - which CGX has done

[Geologist5]

Agree totally on what your saying. Exciting for sure!