CGX Energy Inc V.OYL

Q2-2021 - HESS EARNINGS CALL

[OIL_RUN]

Fantastic call from Hess - Guyana remains their crown jewel asset to deliver long term value to shareholders "in any oil price scenario".

* Whiptail-1 and Whiptail-2 announced today as commercial discoveries and underpin another potential standalone future development. Reservoir conditions - "outstanding". Drilling on both wells continue to test deeper prospects / pay. 


* Uaru and Maka discoveries appear to pegged for another standalone commercial development that is being planned by Stabroek venture group. Tentatively set to be sanctioned after Yellowtail development.


* Stabroek venture group reinforced earlier guidance of sanctioning one major development every year. Current line of sight to sanction 10 standalone large FPSO developments (220k-250k per day). Once Liza II comes online - production from Liza I and Liza II will fund remaining developments.

* All field developments are expected to have a long production life cycle. Much longer than your typical deepwater development production life cycle. Resource density around planned development hubs supports eventual tie back of other undeveloped nearby (new) resources in either the Santonian or Campanian. Proceeding with developing infrastructure to sustain development period for a "very" long time.

* Additional near term exploration campaigns include Fangtooth, Cataback, and Pinktail. Hess will test deeper play targets. In terms of testing the deeper plays, Hess is talking about the bottom of the Campanian and lower Campanian and then down into the Santonian. These deeper horizons have the potential to be a very large addition to the recoverable resource base. Hess has had eight penetrations to-date in the deeper plays. Given recent exploration success in Suriname, Hess is excited to see just how prolific the lower Campanian and Santonian intervals are in the Stabroek license.  Thus far, with a few number of penetrations in the deeper horizon, the Stabroek venture group is encouraged. However, a lot more exploration drilling is required to fully understand that potential of the deeper plays.

* Suriname Block 42 exploration drilling will commence in early 2022. Block 59 exploration drilling could occur in 2023.

[oldcompanyman]

Hi OIL_RUN, Based on the other board members' indications, could you have a look at my post "Kawa-1 pressure regime" and give your opinion, if possible? Thx,

[OIL_RUN]

This is a good question. I believe CGX has contracted Baker to perform a pore pressure analysis to cover the Kawa-1 well. That's probably one of the best service companies out there to perform this study. I would also assume Baker was able to leverage their experience in the basin - got to believe they are intricately involved in either the Exxon or Apache campaigns.   You also

[oldcompanyman]

Thanks for this detailed answer. The fact that the well is not HPHT makes a huge difference in terms of operational outcome uncertainties and in terms of well timing, based on the information you give, my professional judgment is that 80-85 days is more than sufficient time to drill this well, including relevant contingency liners and such. Another interesting point is that, as I had highlighted

[ljmorin]

Thanks OCM, Great post as usual. The drill rig is still in TT port, do these seem like normal timelines between drills. Sorta seems right to me as they were on a fairly lengthy drill previously. Also this is supposed to be a very tight hole [no information until released by CGX after TD] In my experience there always seem to be leaks along the way.  Any thoughts on that. Thanks, LJ

[oldcompanyman]

I guess it is common practice not to release anything until well TD. Regarding leaks...somehow it reminds me of the very first Cobalt well in Angola in 2011 (or 2012, anyway no difference) , I happened to need a fishing specialist on my rig one day, I spent beyond the normal 12-hours shift on the rigfloor trying to sort out my sh*t and then the superintendent called me late in the evening when I