CGX Energy Inc V.OYL

Alternate Symbol(s): CGXEF

Energy Oil & Gas E&P

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.

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CGX Energy Inc

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Post by Oregonduckon Oct 09, 2022 2:09am

1109 Views

Post# 35014559

Deathl Spiral Financing

Convertible financing is called "Death Spiral Financing" as it would cause the debtor's stock to fall off the chart. This looks to be the case for OYL.

The reason is because of the massive dilution factor with the lender owning huge amount of cheap shares when it converts. Around 2019, Frontera (FEC) converted its bridge loan into OYL @ US$0.22. Now, it controls about 73% of OYL. Should OYL be unable to repay its convertible loan by 22 Nov., FEC will effectively own It.

Under Canadian takeover law, a company can mount a takeover if it holds 66 2/3 or more of a target's shares. A compulsory takeover for 100% can then occur if it receives 90% of those shares following the takeover bid under the "Squeeze Out" provision.

It appears the Guyana discovery and deep-sea facility are extremely valuable to FEC.

FEC was once the largest oil company in Columbia until it was forced to file for bankruptcy protection under CCAA proceedings. It then undertook a 1-New-for-100,000-Old shares rollback coming out of it's bankruptcy discharge.