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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

Comment by PlainviewOilon Jan 02, 2022 11:39pm
277 Views
Post# 34278160

RE:RE:Dirksidetrack Recent Posts

RE:RE:Dirksidetrack Recent Posts

Given CGX's size, I've always assumed their strategy was discover and sell or at least dilute to allow someone else to operate. That's the fastest way to realize value from a discovery. Generally speaking only the big boys have the pockets deep enough to actually build these production facilities and run them long term. You've got to weather a lot of debt for a long time before you see cash flow. It's also generally not worth it to operate this size of a field much below 50% ownership. Usually more headache than it's worth to deal with smaller partners.

Proper technical evaluation can take months, and usually continues long after initial press releases about discoveries. Deals take even longer depending on who you're dealing with. Some of those big boys can move "fast", others lumber along with so much inertia they'd take months to evaluate a large opportunity. Even longer to figure out how they want to develop it.

It'll take even longer because to my knowledge most super majors would also want to evaluate CGX and Fronterra as a potential partner if you aren't completely buying them out, and it can be hard to start doing business with someone you don't have a history with. There's also government approval processes to operate, and added overhead of entering a new country. Most logical potential partners would be those already operating in country.

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