While all of the commercially viable oil discoveries offshore Guyana have so far been made by United States (US)-oil giant ExxonMobil and its partners, another operator, Canada-based CGX Energy Inc. and its partner Frontera Energy Corporation have announced that they too have now made a major oil find in local waters.
Minister of Natural Resources Vickram Bharrat
CGX and Frontera Energy first spudded the Wei-1 well in the Corentyne block in January of this year. In a statement on Tuesday, the joint venture partners announced that they have encountered 210 feet of oil-bearing sand in the well… a major oil discovery, considering the co-vees previous difficulty finding commercially viable oil.
They further explained that having finished drilling without any safety incidents, they expect to release the drilling rig early next month. It was explained that rock and fluid samples will be analyzed by an independent lab over the next two-three months, to properly define how much oil was found. Additionally, they noted that there are other parts of the Corentyne block’s northern portion that are yet to be evaluated.
CGX Chairman Dr Suresh Narine
“The Joint Venture has updated its previously announced discovery in the Maastrichtian and the Campanian intervals to 77ft of net pay. Fluid samples were retrieved from the Campanian and Maastrichtian indicating the presence of light crude in the Campanian and sweet medium crude oil in the Maastrichtian,” the partners explained.
“The Joint Venture’s data acquisition program included wireline logging, MDT fluid samples and sidewall cores throughout the various intervals. Over the next few months, results will be integrated into the geologic and geophysical models to form an updated view of the entire northern portion of the Corentyne block.”
The northern portion of the Corentyne block includes the channel complexes discovered by the Kawa-1 and Wei-1 wells, and a prospective central channel complex, which is yet to be evaluated but which has the potential for more oil.
“The Joint Venture is excited by the definitive presence of oil in the Maastrichtian and Campanian and the presence of hydrocarbons in the Santonian and believes there is significant potential in the block,” CGX and Frontera said.
Oil potential
In a statement welcoming the find, the Ministry of Natural Resources noted that CGX’s announcement reaffirms the potential for further oil finds in Guyana’s Exclusive Economic Zone (EEZ). They also noted that the discovery marks an important milestone in offshore Guyana’s exploration endeavors, with a total of 45 findings since 2015.
Frontera CEO Orlando Cabrales
“Notably, the Maastrichtian and Campanian intervals have demonstrated a significant net pay of 23.5 meters, as reported to the ministry. In order to thoroughly evaluate the potential, CGX Energy is currently conducting comprehensive assessments specifically focused on the Santonian interval,” the Ministry said.
“Preliminary investigations using wireline logs and core samples have revealed the presence of 64 meters of hydrocarbon-bearing sands within the Santonian interval. However, it is important to note that these findings are yet to be verified as no physical samples were obtained.”
According to the Ministry, it is necessary for an independent third-party laboratory to analyze the rock and fluid properties extracted from the Santonian core, in order to determine the net pay and establish a basis for evaluating the find.
The Ministry of Natural Resources further noted that it is eagerly awaiting the results of this analysis, which will enable CGX Energy to ascertain whether the second discovery in the block is commercially viable.
Kawa-1
CGX’s first discovery in the Corentyne block, the Kawa-1, struck light oil and gas condensate in May 2022. However, the well was subsequently plugged, with appraisal works expected in future.
The Wei-1 well is located approximately 14 kilometres northwest of the Kawa-1 discovery. The joint venture had announced in January 2023 that the Guyana Government had approved an appraisal plan for the northern section of the Corentyne Block which commenced with the Wei-1 well.
“Following completion of Wei-1 drilling operations and upon detailed analysis of the results, the joint venture may consider future wells per its appraisal programme to evaluate possible development feasibility in the Kawa-1 discovery area and throughout the northern section of the Corentyne Block,” the missive from the company had detailed.
It had further stated that any future drilling is contingent on positive results at Wei-1 and that the joint venture has no further drilling obligations beyond the Wei-1 well. CGX currently holds a 32 per cent participating interest in the Corentyne Block while 68 per cent is held by Frontera, after CGX decided to sell its majority stake last July.
It was explained that as part of the agreement, CGX will transfer 29.73 per cent of its participating interest in the Corentyne Block to Frontera in exchange for Frontera funding the joint venture’s costs associated with the Wei-1 exploration well for up to US$130 million.
Frontera would also provide up to an additional US$29 million for the Kawa-1 exploration well, Wei-1 pre-drill, and other costs. (G3)
