CGX Energy Inc V.OYL

Financing options

[Devanand1]

I guess the elephant in the room is where would CGX get the money to move forward with their share of drilling cost and the further development of the wharf.

10million dollars is not a lot of money to pursue this basket of activities so this begs the question. Where would the money come from and what are their options of raising the funds?

I am interested in your thoughts? 

[ljmorin]

We only have a one year extension. So the big JVs might possibly want to just wait it out and watch it fail and then bid on the spoils after we are toast. We do not have allot of leverage or time. I think Frontera basically has to say we are drillling even if they have to go it alone to get some stroke back. Even if its just one well. A possible JV partner that wants into the area bad may possibly

[westcanpride]

I agree 100% ljmorin. Was going to post something very similar.  For all instense purposes, CGX and there grossly overpaid managment/BoD are meaningless going forward (not that they provided any value previously).... minus de Alba... he holds all the power right now. For rest of CGX as a whole, I think they are completely happy to sit around, collect massive salaries/shares and do the

[chulo123]

Of what I'm aware, cgx made a down paymnent to an operator of the Utakwaaka well a year ago, and I think that they have an agreement to continiue in a different well with the drilling operation and the operator accepted with this down payment for the new drilling operation. Can someone confirm this information? Did I dream it? haha

[OIL_RUN]

I somewhat disagree. Let's just say that CGX does not fulfill its commitments and the licenses lapse. Do you think the government of Guyana is going to issue any new offshore licenses with comparable fiscal terms? In my humble opinion, having seen this happen around the world from Ghana, Uganda, Mozambique, Senegal, Mauritania, and many other countries - once a basin is de-risked the

[westcanpride]

You make excellent point Oil_Run. In today's world, and probably foreseeable future, of low oil prices, every tax and royalty adds up quickly in determining year end cash flow. To be certain, Corentyne and Demerra probably have some very favorable term attached (something I never though about before to be honest).... makes you wonder even more how in the hell CGX cannot leverage this kind of

[jtdd]

MAKES MUCH MORE SENSE!!

[tiger77]

Oil-Run, excellent post as always! My only concern and even concern is not the right word is that Frontera doesn't actually want a JV and wants to keep this for themselves for the reserves.  Again not a horribly bad thing other than a raise will be needed which will dilute us again. I'm sure they are speaking with other companies and listening to them but my gut is saying that

[waitingstill]

Tiger - that is a possibility but Frontera would be fools to do that. That said, I would not put it past them. They have not drilled one offshore well themselves so they have no experience. They have 33 percent. They will have a difficult time funding just that 33 percent going forward once a big drill program is announced. Even majors share the risk in these types of plays and there are no sure

[westcanpride]

I agree waitingstill.  As per 3Q 2020 Frontera results (all in USD): - $421 million cash on hand ($161 million is restricted). So in essence they have $260 million to play with... how much of this $260 million is already allocated to other CAPEX/OPEX with there other future operations in other basins is anyone's guess.  - $557 million total debt and $113 million net debt (once all

[jada13]

Well said .if they drill themselves or with a JV it all comes down to when do you sell.when that drill bit turns before discovery the price is always up .sell then or go for broke that's up to each of us and our risk to reward logic.

[jada13]

Cgx keeps giving away to stay alive so I would say they fallow the same pattern and give away a good chunk to a JV .

[soulfire]

I say heads need to roll to show they mean business. The current management is ineffective as per the most recent news release. These guys are small timers at best. They need real oil and gas personel to handle this company and I don't even think they will be able to handle success if we have a major strike. They might S**T their pants. Suresh is a major obstacle and I'd be happy to see

[waitingstill]

I think they would be wise to give up up to 50 percent as long as they get large upfront/back cost payment and free carry for a number of wells and future production costs somewhat like what Apache did.

[waitingstill]

I think they would be wise to give up up to 50 percent as long as they get large upfront/back cost payment and free carry for a number of wells and future production costs somewhat like what Apache did.

[OIL_RUN]

I think CGX can farm out 15% of each license for a two well exploration carry on each license (IMHO). Frontera alluded to the likelihood of multiple (more than one) JV opportunities on their last two earnings calls. Remember also that as part of farm-down with Frontera - CGX is carried for 8.5% gross for first two exploration wells on each license. By farming down a small portion of each

[westcanpride]

That would be a dream deal at this point waitingstill. We also need to remember Apache was producing ~450,000 boed back in 4Q 2019 and had a market cap of close to $10B USD. Apache in theory could have drilled these past four Suriname wells by themselves. They knew, however, that having long-term captial was critical to actually seeing production occur (likely 5 years from now at a bare minimum