RE:RE:Sept 23 - CGX Energy Provides Operational UpdateTiger77,
I have a similar read through as Chedda. This news release is a positive step in the right direction. Taking a step back, we (CGX shareholders) have a front row seat to the hottest exploration basin in the world. We just have to be patient here and let industry continue to advance and de-risk the basin which will only further enhance the valuation of CGX’s offshore licenses.
Moreover, we are clearly seeing positive well results from others in the basin having a direct impact on CGX/Frontera’s 2020 drill program. I applaud CGX/Frontera in pursuing a strategy that allows them to ‘replicate basin success’ and focus on play types that are proven and have been de-risked. ‘String of pearls’, per we.
in terms of basin activity we still have some pretty significant catalysts near term. Perhaps the biggest of the year (in my opinion) is Apache’s Maka well (expected to be directly adjacent to the Northern Corentyne Area).
in addition, we have Repsol’s Carapa which will test a new play type in a different depositions setting in the basin (shallow water). Furthermore, we can be sure to hear something from Tullow / Econregarding their next steps on Orinduik before end of year.
So, lots of news expected near term all having (in my humble opinion) direct implications for CGX.
in terms of the news release this was my read:
* very likely CGX will elect to drill in the Northern Corentyne Area in 2020 (likely to drill a prospect that is proven at that water depth / depositional setting).
* very likely CGX will elect to drill a tertiary prospect on Demerara in 2020 (likely to drill a prospect that is a proven play type at that water depth / depositional setting). Hoping it’s the toe thrust play....
* Ability to transfer funds / deposit to any of the drilling conteactir’s offshore units provided agreement is reached in it before July 20, 2020. My read through here is that CGX will elect to drill with a floater as opposed to a jack up as part of high grading their 2020 drill prospects (proven play type mentioned above).
* Appointment of Mike Stockinger solidifies CGX position they are moving forward as operator of both blocks in 2020. I like this bold approach; a clear sign that CGX is not over relying on a JV to advance their 2020 drilling program.
outside of this news release - I also expect the Bridge Loan III to be converted into CGX common shares by end of this month. After this transaction is complete - it’s possible we could see Frontera look to increase their equity position in CGX even further given it current low valuation.
Exciting times ahead!