Partners in the Corentyne block offshore Guyana – Canada’s CGX Energy and Frontera Energy – have completed the previously announced agreement for the block, enabling them to secure funding for their exploration well, which is slated to be spud once the Noble-owned rig, hired for this assignment, arrives at the location.
Earlier this year, CGX Energy and Frontera Energy entered into an agreement to amend the Joint Operating Agreement originally signed between CGX and a subsidiary of Frontera on 30 January 2019, enabling Frontera to farm into the Corentyne block. The amended deal increases the Canadian player’s stake in the block and secures funding for the Wei-1 exploration well.
In a recent update, the Joint Venture disclosed that all conditions precedent to the JOA Amendment have been satisfied, thus, as a result of this, CGX has a 32 per cent participating interest and Frontera has a 68 per cent participating interest in the Corentyne block, pending the filing of customary documentation with the government of Guyana.
Professor Suresh Narine, Executive Co-Chairman of CGX’s Board of Directors, commented: “With the JOA Amendment now concluded, additional funding for the drilling of Wei-1 is secured and CGX has a clean balance sheet with no loans and encumbrances. We now look forward to the drilling of Wei-1 and the potential extension of the Kawa-1 discovery in the northern section of the Corentyne block.”
As part of this amendment, CGX transferred 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 well for up to $130 million and up to an additional $29 million of Kawa-1 exploration well, Wei-1 pre-drill, and other costs.
Furthermore, CGX assigned 4.94 per cent of its participating interest, pending the filing of customary documentation with the government of Guyana, in the Corentyne block to Frontera as consideration for the repayment of the outstanding principal amounts under the previously announced $19 million convertible loan to CGX dated 28 May 2021, as amended, and the previously announced $35 million convertible loan to CGX dated 10 March 2022, as amended, and a cash payment of $3.8 million.
Orlando Cabrales, Chief Executive Officer of Frontera, remarked: “The Joint Venture continues to operationally and commercially progress its investments in Guyana. Over the last few months, we’ve filed a Notice of Potential Commercial Interest regarding Kawa-1, and we’ve reached agreement with the government of Guyana that the Wei-1 well will be spudded no later than 31 January 2023, thus ensuring that the Corentyne license remains in full force and effect and good standing.
“Looking ahead, we are firmly focused on building on the Joint Venture’s recent light oil and condensate discovery at the Kawa-1 well and successfully spudding the Wei-1 well and the tremendous opportunity that is now before us on the Corentyne Block in one of the most exciting exploration areas in the world.”
Located approximately 14 kilometres northwest of the Kawa-1 exploration well, approximately 200 kilometres offshore from Georgetown, Guyana, the Wei-1 well is targeting Maastrichtian, Campanian and Santonian aged stacked channels in a western channel complex in the northern section of the Corentyne block. This well 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).
The 2009-built Noble Discoverer, which will carry out this assignment, is a DSS-21 column-stabilized dynamically positioned, sixth-generation semi-submersible drilling rig, capable of operating in water depths of up to 10,000 ft.