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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. It is focused on the exploration of oil in the Guyana-Suriname Basin and the development of a deep-water port in Berbice, Guyana. The Company, through one of its subsidiaries, holds an interest in a Petroleum Prospecting Licence (PPL) and related Petroleum Agreement (PA) on the Corentyne block in the Guyana Basin, offshore Guyana. The Company, through its subsidiary Grand Canal Industrial Estates, is constructing the Berbice Deep Water Port. This facility, located on the eastern bank of the Berbice River, adjacent to and north of Crab Island in Region 6, Guyana, is being constructed on 30 acres with 400 m of river frontage. Its subsidiaries include CGX Resources Inc., GCIE Holdings Limited and CGX Energy Management Corp. It is the operator of the Corentyne block and holds a 27.48% working interest. Its Wei-1 exploration well is located west of the Kawa-1 discovery in the northern region of the Corentyne block.


TSXV:OYL - Post by User

Post by westcanprideon May 07, 2021 11:30am
194 Views
Post# 33152345

Risk vs Reward!

Risk vs Reward! End of day, Frontera needs to very carefully weigh the risk vs. reward of drilling Kawa-1 alone. Exxon JV in Guyana and Total-Apache in Suriname have shown that up front multi-billions are needed to drill exploration and appraisal wells before any final investment decisions (FID) are made. Once FID are made, billions more are needed to drill development injector/producer wells before any money is made. Offshore is total different beast from onshore.

The current $90MM being proposed for the two-well campaign is a literal drop in the bucket big picture. Everyone knows this. Saying all this, if Frontera would rather drill alone with the hopes of making a massive splash (say 300 million barrels recoverable from a 1 billion barrel discovery in Kawa-1), they might have a easier time of attracting a big-pocket JV partner who would be willing to join along on financial terms more favorable to Frontera. Then again, so many companies globally have actual discovered resources but no way of producing their oil-gas because they lack the necessary funds/potential JV partners are unwilling to pay the desired demands being requested. 

Guess my point is... don't get too greedy. Super easy to fantisize about what ifs... as Exxon has shown in 2021, dry/less desireable outcomes are also very possible in Guana. I could outline countless geological/engineering scenarios where Kawa-1 could come back less than optimal. I personally would much rather have guaranteed financial backing for these wells instead of being greedy and hoping to hit the proverbial grand slam. That is just me though. See what happens in the next 2 months. 
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