(Reuters) – Frontera Energy (FEC.TO) and its unit CGX Energy (OYL.V) expect to complete an analysis in the next two to three months of the Wei-1 oil well in Guyana before deciding whether to upgrade an exploration license to its development phase, Frontera said on Friday.
The Frontera-CGX group could become the next oil consortium to advance an oil exploration project in Guyana to development after an Exxon Mobil-led (XOM.N) group did so.
Wei-1 is one of two wells on the Corentyne block that the companies had committed to drill in Guyana, where production is expected to reach 1.2 million barrels per day (bpd) by 2027 by the Exxon group.
“We are analyzing the significant amount of data we got from the well, which will take a couple of months. That will tell us the potential of the block,” a company executive said in a call with investors. “Any move we make in relation with the license will depend on that analysis.”
Frontera on Thursday said the joint venture was “excited by the definitive presence of oil in the Maastrichtian and Campanian, and the presence of hydrocarbons in the Santonian” areas of its exploration territory.
“We believe there is significant potential in the block,” it said, adding that the presence of light oil had been detected.
Frontera’s previous well, Kawa-1, struck light oil and gas condensate in May last year.
Frontera posted net income of $80.2 million in the second quarter, compared with a loss of $11.3 million or in the prior quarter and net of $13.5 million in the second quarter of 2022, the firm said on Thursday.
Capital expenditures rose to $154.9 million in the reported period -of which almost $73 million were related to Guyana-, from $131.5 million in the prior quarter.