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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 Beaner1814on May 09, 2022 9:34pm
271 Views
Post# 34669139

RE:RE:Takeaways for those that dined in

RE:RE:Takeaways for those that dined in

Based on what was explicitly stated by Dr Zoback, and the rest of the panel.

However, I do agree that statements may be interpreted in a variety of ways, one of which being that Wei-1 may be be drilled by CGX and FEC without any further JV partner. This could be one of the strategic options being considered to raise the bargaining position of the JV. And I encourage everyone to do their own due diligence and connect the dots in a rational way.

However, given the window to the Q3 spud date and a lack of information as how CGX will fully fund the drill, you don't have a member of the Board publicly state that the company is looking at multiple strategic options, has had interest from multiple majors in the area, and are exclusively focused on the Corentyne (even suggesting that the central corentyne channel is another target area) without questioning how stupid it would be for CGX to prioritize a capital raise and/or related party loan over any offers on the table to JV with a major or sell those assets not worth CGX's time (keeping in mind that CGX cannot use the proceeds of the sale of Berbice, should it occur, to fund the drill as per the last loan with FEC). So will FEC and CGX drill Wei-1? Undoubtedly. Is it likely that they will do so alone? Only if doing so is likely to provide CGX greater bargaining leverage (but consider looking at what is at stake).

If we wanted to really think outside the box, and what would truly be surprising, is what major has the ability to rapidly mobilize a rig, or rigs, to drill the commitment wells on the Demerara block before February 2023 (being roughly 9 months away). I would say that a JV partner committed to securing the terms of the present Demerara PA, as well as the commitment to develop both block, is what would be a massive win.

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