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Bullboard - Stock Discussion Forum CGX Energy Inc V.OYL

Alternate Symbol(s):  CGXEF

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... see more

TSXV:OYL - Post Discussion

CGX Energy Inc > OTHER INTERESTED PARTIES
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Post by OIL_RUN on May 30, 2024 6:06pm

OTHER INTERESTED PARTIES

My two cents...


We have heard various statements from the Guyana Government this past week regarding the need for timely and efficient development of discoveries that have been made (or announced). 


At the center of this dialogue is the discovered resource adjacent to the North Corentyne Area - where Exxon has recently made plans to drill 6-8 exploration appraisal wells. Emphasis towards Pluma (drilled in 2018) and Haimara (early 2019) that have been in a holding pattern (w/ an unclear plan of development) for the past 5 years or so.


From what we understand, the shallow discoveries made in this general area comprise gas, condensate, and high quality oil - reservoirs having exceptional permability / porosity.  


Recent key statements from government officials include:
- engaging outside experts to validate / confirm project viability (even if the resource base is mostly gas).
- testing the market (received expressions of interest) with 'credible' firms that are wanting to move forward with developing the resource.
- Government speaking with Exxon and given clear instruction that if they have no plan to develop the resource - the government will ask them to relinquish the area by October of this year. Noting, Stabroek license will end in late 2027.
- Government / Cabinet has perceived rights to approve a new firm (operator) to develop the resource - in turn, initiate talks with Exxon over the project.
 

Reading between the lines, I am not sure the Guyana Government can push Exxon to relinquish a specific area of their exploration license. Nor, instruct Exxon that another firm will be coming in to develop the resource that has been made on the Stabroek license. These topics the government wants to push with Exxon would appear to be outside of the current Stabroek PPL (contract) and fairly irregular in terms of industry standards.


However, if there are unitization issues at play - the government is indeed allowed to step in to not only resolve issues / disputes - but, also bring in other third parties to develop the resource (subject to cabinet approval). This is very clear in both Exxon and CGX's PPL.


Taking a step back, it seems like the Goverment is wanting this resource developed - even if mostly gas. They are in talks with other firms fully capable to move the resource towards development.


Reading between the lines - I suspect such a development (in order to be fully optimized) might involved development of resources / discoveries that straddle the boundaries of Stabroek and Corentyne.


Trying to get everyone to move in a common direction is not easy. However, with government pushing the agenda and willing to have other firms involved - certainly a motivator for the present operators to get with the program.

Comment by Frank007 on May 30, 2024 7:20pm
This is not the same gov,t that  was in power when oil was discovered ...it's a socialist gov,t and like Colombia are giving it a try ..these guys like Petro in Colombia will be gone by the next election ...that's my call ..Petro has already destroyed the aaColombian economy ....these guys only have oil revenues to splash around to stay in power ....so will the new gov,t .....
Comment by Ermosp on May 31, 2024 3:32am
Thanks as always Oil Run. Is there a date implied by which a deal has to be done you think? @shedrills mentioned June per the contract. You are saying Exxon was given till October Half the annoying part with this stock is the lack of clear timeline for any catalyst - which at this point is really only the deal