– ending over 2 decades wait for commercial oil find in local waters
CGX Energy Incorporated and its Joint Venture partner Frontera Energy Corporation have announced an oil find in the Kawa-1 well in the Corentyne Block, bringing an end to an over two decades wait for the company’s maiden discovery of oil in commercial quantities.
According to a statement, the Kawa-1 well was drilled to a depth of 21,578 feet and encountered some 177 feet of oil-bearing reserves in the well during an initial evaluation. There are further hydrocarbon-bearing sands that were encountered, which the companies said will be analysed and possibly form the targets of future exploration.
“The Kawa-1 results support the Joint Venture’s geological and geophysical models and have helped de-risk equivalent targets in other parts of the Corentyne licence area. The end of well forecast is currently projected to be the end of February 2022,” the statement said.
“Information on final well cost estimates and additional results will be announced upon completion of end of well activities. CGX is currently assessing several strategic opportunities to obtain additional financing to meet the costs of the drilling program,” it added.
Meanwhile, the company said that in the wake of its success at the Kawa-1 well, a second well called the Wei-1 will be spud in the north-western part of the Corentyne Block in the second half of the year.
The statement carried with it the comments of Frontera Chairman and CGX Co-Chairman Gabriel De Alba, who lauded the Government of Guyana for its longstanding support of the Canadian company.
“Initial results from the Kawa-1 well are positive and reinforce CGX and Frontera’s belief in the potentially transformational opportunity our investments and interests in Guyana present for our companies and the country,” he said.
“Kawa-1 results add to the growing success story unfolding in offshore Guyana as the country emerges as a global oil and gas exploration hotspot. On behalf of the Joint Venture, I’d like to thank the Government of Guyana for its long-standing support as we worked together to deliver this successful outcome,” De Alba also said.
Executive Co-Chairman of CGX, Professor Suresh Narine meanwhile described the oil find as a positive milestone in the company’s journey in the Guyana basin. He also made it clear that CGX eagerly anticipates taking part in the development of Guyana’s oil industry.
“Together with our partner Frontera, CGX looks forward to continuing our socially and environmentally conscious approach to development of Guyana’s oil and gas industry and port infrastructure. We are proud of our long partnership with the Government and people of Guyana and of our reputation as Guyana’s Indigenous oil company,” Narine said.
Also commenting on the find was Frontera CEO Orlando Cabrales, who commended all the technical staff involved and noted that the company now has a chance to focus on transformational opportunities that come with the oil find.
Back in August of 2021, CGX had spudded the Kawa-1 well, which had been described by Alba as one of the most exciting exploration wells in the world. The Kawa-1 well, which is approximately 200 kilometres offshore Georgetown, was expected to de-risk multiple prospects in the Corentyne Block. Both the Corentyne and Demerara Blocks have been in CGX’s hand for some time without being drilled.
In 2020, CGX Energy had announced that the Government, following discussions on the drilling delays in the Corentyne oil block, had agreed to give CGX a one-year extension until November 27, 2021, by which time they were expected to commence drilling in the Corentyne Block.
Back in May 2019, the former Government had approved a Strategic Joint Venture between CGX Energy Inc and Frontera Energy Corporation to farm into two shallow-water offshore Petroleum Prospecting Licences for the Corentyne and Demerara Blocks – both of which are adjacent to ExxonMobil’s Stabroek Block, where multiple discoveries have been made. The farm-in joint venture allowed Frontera to acquire a 33.333 per cent working interest in the two blocks.
CGX and Frontera Energy had previously commissioned an independent report which had revealed that they are potentially sitting on 4.9 million Barrels of Oil Equivalent (BOE) in the Demerara and Corentyne, Guyana oil blocks under their control.