more food for thoughtAfter Exxon's success at both Pluma and Haimara in south east Stabroek near the north Corentyne border, CGX abandoned it's plans to drill Utakwaaka and moved exploration to north Corentyne. They commissioned new seismic and eventually developed the plan to drill both Kawa-1 and Wei-1. Page 10 of the December 2023 Technical Webinar states:
"This was a two-well drilling program, and results from both wells were required to determine a forward plan."
Both wells were also necessary to arrive at the estimate of 512-628mmboe in the Mastrichtian. Wei-1 primary target was a dud, so it doesn’t matter which well was drilled first, the act of valuing the potential of the block is impossible and unfair halfway through a “two well program”. Yet, this is what took place. The JV under Frontera's total control, bought the H&P report and transferred working interest in the Corentyne block, directly from CGX to Frontera, it's majority shareholder. CGX paid for 2/3 of Kawa. Half of CGX’s share of Corentyne and half of minority shareholder’s equity was taken to pay for Kawa overage and 1/3 of Wei-1. Ouch.
Across the border in Suriname, Total has drilled several wells thus far, some duds, still with no FID, and APA remains a 50% partner due to the reimbursable carry provided by Total. (although they will reduce to 40% each to accommodate Stattsolie coming in with $1.7 billion for 20% of the 700mmboe at Sapakara/Krabdagu)
Imagine where CGX will be if this funding model continues in Corentyne. Has this contributed to our current situation with the prospecting license? How many Guyanese shareholder’s equity was cut in half by this transaction? How many minister’s cousins or friends lost half of their upside potential? Did this event help put Jagdeo in the mood he’s in? The gov, and potential partners see how you treat your current partners and minority shareholders. They see how you release information and observe your conduct in general. Is this a case of what goes around comes around?
I also wonder, would making the relatively small investment to get the Berbice Port to the level of completion where it could move bulk materials, provide employment to Guyanese workers and also help local farmers helped our relationship with the gov? A bit of goodwill would be helpful now, but it's too late for that. Is this more” drip ‘em till ya kill ‘em” from CC?. Seems that may have come back around as well.
If you want to rattle the cage, consider emailing the TSXV. Their policy 5.9 is to apply MI61-101 (minority shareholder protection) to all issuers. As Shriebzey stated, the JV has repeatedly claimed exemption from MI61-101. Just maybe, a plea for minority shareholder protection given the apparent misrepresentation around the time of the H&P report, and the devastating blow to minority shareholders may not fall on deaf ears. Is there a chance of being granted a truly independent retrospective valuation of the block? Let's see.
https://www.kaieteurnewsonline.com/2019/08/04/stabroek-block-discoveries-spark-re-sequencing-of-cgx-work-programme-for-corentyne-block/ https://cgxenergy.com/wp-content/uploads/2023/12/Guyana-Technical-Webinar-Dec-2023.pdf