Canadian oil explorer, CGX Energy Inc., announced this week that it has approached Frontera Energy Corporation, its joint venture partner, for US$20M to cover its share of expenses associated with the petroleum prospecting licenses for the Corentyne and Demerara blocks offshore Guyana. Once approved, the funding would also enable CGX to continue to fund its share of costs related to the Berbice Deepwater Port, and other budgeted costs as agreed to by Frontera.
These funds as well as additional financing alternatives are expected to help CGX meet all of its short-term liquidity requirements over the next 12 months.
Guyana Standard understands that CGX will offer rights to shareholders of its common shares at the close of business on October 1, 2021. Each whole Right will entitle the holder to subscribe for one common share upon payment of the subscription price of C$1.63.
The Rights Offering will expire at 5:00 p.m. (Eastern Time) on October 28, 2021, after which time unexercised Rights will be void and of no value.
It was further noted that the US$20 million Rights Offering Bridge Loan from Frontera to CGX will be available to CGX for drawdown in tranches on a non-revolving basis until October 31, 2021.
In providing an operational update, CGX reminded that on August 22, 2021, the Kawa-1 well was spudded in the Corentyne Block. As of September 23, 2021, the well has achieved the planned casing point at a total depth of 9,900 feet (3,017.5 meters). The crews have successfully run and cemented the 18-inch casing which is the third of five planned casing strings and the well is currently drilling the next hole section below the current last casing point.
The well results thus far are consistent with the Joint Venture’s pre-drill geological and geophysical expectations and formations are coming in on depth. Furthermore, the joint venture partners are looking forward to drilling and evaluating the upcoming well sections and maintaining safe and efficient operations. Both companies expect the Kawa-1 well to reach total depth in the first half of December 2021.
