Update from Pescod's daily letter.
CGX ENERGY (V-OYL) $1.19 +0.27
You can sort of get a handle from time to time on what
are some of our favorite stories of the day, for the number of
times we go back to certain stocks...so you know that CGX
Energy is one of our favorite stories, both because of its
President, Kerry Sully and the enormous magnitude of what
it is they may have offshore Guyana.
In the market crash, CGX got crunched (like many others)
seeing a tenth of its value, which of course gave a lot of peo-
ple an opportunity to scoop up an interesting story dirt-
cheap.
Today, the stock has a great bounce and Kerry Sully
writes this comment for us: “Most people struggle to put
into perspective the magnitude of what we are pursuing, and
why it’s taking so long to process the 3D seismic. A tremen-
dous amount of processing is required to remove noise and
minimize multiple reflections. One filter alone took over a
week of 24 hour-a-day dedicated processing. On our Coren-
tyne Licence, we hope to complete our time imaging by mid-
April, and then our depth imaging by mid-summer.
To get a better idea of the size of the area we are explor-
ing, I’ve overlaid our Corentyne (Main) and Georgetown Ex-
ploration Blocks (light yellow) onto an image of the Atha-
basca Oilsands Area. Our two Blocks cover approximately
4.7 million acres. Our 2344 sq km 3D survey is shown in red,
and covers approximately 2/3 of the surface mineable por-
tion of the oilsands. Of that, 500 sq km was shot on our Cor-
entyne Licence to enhance the prior targets we had identi-
fied – Eagle, Wishbone and Eagle Deep, 3 targets that we
have an independent P50 resource assessment of 2.7 billion
barrels based on 2D seismic. Our goal is to have the 3D con-
firm the continuity that was extrapolated from 2D, and allow
us to optimize our choice of drilling locations.
The oilsands operators are struggling to recover capital
and operating costs at prices below $50 per barrel.
Whereas, production offshore Guyana has the potential to
yield a 10% return after tax for crude prices as low as $20
as determined in the scoping economics from our inde-
pendent consultant.”
CGX Energy