CGX Energy Inc V.OYL

CGX Energy Announces 200ft Net Pay For Kawa-1, Abandons 2022

[AwareInvestor]

CGX Energy this morning released slightly more details on its Kawa-1 well, which was drilled off shore of Guyana. The well was the first such well drilled on the Corentyne Block under a joint venture with Frontera Energy.

https://thedeepdive.ca/cgx-energy-announces-200ft-net-pay-for-kawa-1-abandons-2022-exploration-plans-for-demerara/

[Coloradobuff]

Question for the group. Since they aren't doing demarra will they lose those rights?  follow up speculation: since they aren't drilling, does that mean they are close to a buy out and will let the purchaser do the work their? 

[Hotshot85]

Losing them is a possibility. All we know is what the PR says that they are negotitating with the Guyanese Government.  It will be hard to allocate dollars to Demerra at this point when there are miltiple drilling targets within N corentyene.  Buyout seems unlikely to me. more likely to farmout a portion of the WI. help with the massive upfront costs.  JMHO 2 more things to clear

[steamfitter]

Just because they are not drilling Their other lease does not stop them from sharing their lease I believe. They only have to make a percentage deal 40 -60 or what ever. Just my opinion.  

[Hotshot85]

the problem is the lease is expiriing. they did not meet drilling commitments, This is why they are in discussion with the Government,  you are right, they could farmout that block, sell it. retain a royalty, if they own it.  that is the Issue at the moment,. the fact they did not complete or initiate drilling activity by a certian date.

[Investnowplease]

Personally if i was the government, either you do you work on the block or you loose. Especially when your cash strapped to work this type of large scales play. They would no doubt auction it off for new revenues to another company for huge dollars. No reason for them to extend it. Dont think there would be sny reason that they couldnt farm it to someone with the means, other than the fact that

[Miftee9]

I understand they have at least 20+ targets in their lease that has Kawa.  So what if they lose Demerra?  Nobody is pricing it in as we speak anyway.  They have more than enough on their plate with the existing lease.  It would be better if they could keep it, but I rather them spend their time and money on this lease where they have a better opportunity to exploit their

[Coloradobuff]

It's an asset though. They shouldn't lose it for nothing. 

[Hotshot85]

happens all the time. if you dont abide by the terms of the lease, you lose it. or you try renegotiate the terms. 

[Investnowplease]

The gov has no reason tp renegotiate the terms. They could take it back, auction it off, get even better terms, and bring money in right away.   There is seriously no reason to do it.  As was stated.  Who cares wrt to CGX. That block adds zero NPV to valuation right now. If they where dmart the only option is to farm it out if they can. Thats a low probability but worth a try

[waitingstill]

Now that CGX has the real deal in Kawa and Wei on the horizon, they don't really have the capability to do another block. Plus there is a financing issue. No D block means less worry about how to pay for it. That said, if they could farm it out completely and retain a small percentage for a big carryon, that would be the best option and until it is taken away. It remains an option.

[Investnowplease]

Agreed.   They simply dont have the resources.... period.  Big boy game drilling 100m dollar wells.  No matter how you look at it. And thats chump change compared to Development costs. 

[Rapsani]

Actually not such a touugh position to be in.  By drilling another well say this year in the same block they are over commiting on the requirements to keep the block - this will be used to offset the under commitment for Demera.  It's been done before where similar work was essentially moved from one block to another.  My guess is though with the political pressure to toughen

[ljmorin]

I agree with you Raps, Now that they have oil it is in the governments best interest for them to carry on there as well. The Royalties will be closer at hand then do straight wildcat exploration in Dem. I think the Government will let Guyana's Indiginous Oil Company keep it. Possibly with different terms.  As us longs know we shouldn't even be here, can't really believe we are