– aim to build on light oil and condensate discovery at Kawa-1 well
After a postponement back in November 2022, Canadian companies CGX Energy Incorporated and Frontera Energy Corp, joint venture partners in the Corentyne oil block, on Wednesday announced the commencement of drilling activities at the Wei-1 well offshore Guyana.
CGX Co-Chairman, Professor Suresh Narine
The Wei-1 well will be drilled in a water depth of approximately 583 metres (1912 feet) to an anticipated total depth of 6248 metres (20,500 feet), approximately 200 kilometres offshore from Georgetown. It is expected to take approximately four to five months for the well to reach total depth.
In a statement on Wednesday, CGX explained that the well will target Maastrichtian, Campanian, and Santonian-aged stacked sands within channel and fan complexes in the northern section of the Corentyne Block.
Frontera and CGX were initially scheduled to begin drilling the well by November 27, 2022. Additionally, the Noble Discoverer semi-submersible mobile drilling unit that was slated to spud the well was expected to arrive in Guyana’s waters in October last year.
However, in November, the two companies had announced that an agreement was reached with the Guyana Government to start drilling no later than January 31, 2023, to allow contractor Noble Corp Plc to complete current obligations in Trinidad.
Wei-1 is one of two wells in Guyana’s Corentyne Block that the companies have committed to drill.
The other well, Kawa-1, struck light oil and gas condensate in May 2022, though the companies had not said how much oil was found or whether it was commercially viable.
The Wei-1 well is located approximately 14 kilometres northwest of the Kawa-1 discovery.
In fact, the joint venture also announced on Wednesday that the Guyana Government has 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 detailed.
It 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.
According to Executive Co-Chairman of CGX Energy’s Board of Directors, Professor Suresh Narine, the Wei-1 will appraise both the Kawa-1 discovery as well as explore additional opportunities within the Corentyne Block.
“The Wei-1 well is on-trend, and well positioned for success with both Kawa-1 and recent peer discoveries immediately adjacent to the northern section of the Corentyne Block. The joint venture is grateful for the Government of Guyana’s ongoing support as we worked towards spudding Wei-1 in accordance with the previously-agreed terms, and we look forward to potentially delivering another discovery for our shareholders and the Guyanese people,” Professor Narine stated.
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.
Additionally, Frontera will provide up to an additional US$29 million for the Kawa-1 exploration well, Wei-1 pre-drill, and other costs.
Only last July, CGX underwent a major shakeup in management. These changes included the naming of a new Chief Financial Officer (CFO), George Davis, who took over from Hill York Poon. Poon was retained as CGX’s Director of Finance. Meanwhile, Paul Langlois was appointed as the new Exploration Manager.
CGX and Frontera Energy Corporation had previously commissioned an independent report which had revealed that they were potentially sitting on 4.9 million barrels of oil equivalent (BOE) in the Demerara and Corentyne oil blocks under their control.
In February 2022, the partners had announced an oil find of 177 feet of oil-bearing reserves at the Kawa-1 well in the Corentyne Block. Since then, however, the company has been making moves to scale back its presence in the other blocks.
It was announced that CGX had reached an agreement with the Government to relinquish larger sections of the Demerara and Corentyne Blocks. Both the Corentyne and Demerara Blocks have been in CGX’s hands for some time without being drilled.
Back in May 2019, the Strategic Joint Venture between CGX and Frontera was approved to farm in to two shallow-water offshore Petroleum Prospecting Licences for the Corentyne and Demerara Blocks.
These blocks are adjacent to ExxonMobil’s oil-rich Stabroek Block, where multiple discoveries have been made.
