CGX Energy Inc. disclosed this morning that it plans to surrender majority interest in the Corentyne Block to its Canadian partner, Frontera Energy Corporation in exchange for covering its share of expenses for the second well in the block called Wei-1, among other activities.
The Canadian company said the foregoing deal remains subject to certain conditions including confirmations from the Government of Guyana relating to the petroleum agreement for the Corentyne block.
As part of the agreement, CGX will transfer 29.73% of its participating interest in the Corentyne block to Frontera.
In exchange, Frontera will fund the joint venture’s costs associated with the Wei-1 exploration well for up to US$130 million and up to an additional US$29 million of certain Kawa-1 exploration well, Wei-1 pre-drill, and other costs.
In addition, CGX said it will assign an additional 4.94% of its participating interest in the Corentyne block to Frontera as consideration for the repayment of the outstanding principal amounts under the previously announced US$19 million convertible loan to CGX dated May 28, 2021, as amended, and the previously announced US$35 million convertible loan to CGX dated March 10, 2022, as amended, and a cash payment of US$3.8 million.
As a result of this agreement, CGX will have a 32.00% participating interest and Frontera will have a 68.00% participating interest in the Corentyne block.
Guyana Standard understands that final preparations are underway in advance of spudding the joint venture’s Wei-1 well in October 2022, subject to rig release from a third-party operator.
The Wei-1 exploration well will be located approximately 14 kilometres northwest of the Kawa-1 exploration well in the Corentyne block, approximately 200 kilometres offshore from Georgetown, Guyana.
The partners previously noted that it will be drilled in a water depth of approximately 1,912 feet (583 metres) to an anticipated total depth of 20,500 feet (6,248 metres) in the northern section of the Corentyne block.