(TSX-V | OYL)
TORONTO, Dec. 19, 2014 /CNW/ - CGX Energy Inc. (TSX-V - OYL) ("CGX Energy" or the "Company") today provided an operational update on its exploration assets and operations in Guyana.
Dewi Jones, Chief Executive Officer of the Company, commented: "2014 was a transformation year for the Company as we continued our exploration offshore in Guyana. As we move into 2015, we are very encouraged by the recent discoveries in Senegal and the heightened level of exploration activity in the Guyana-Suriname Basin. There will be at least two offshore wells drilled prior to our next exploration commitment well on the Corentyne Block and we expect upwards of 10 wells being drilled in the basin in 2015 and 2016."
- Repsol Settlement – In December 2014, CGX Energy settled the claims brought against Repsol Exploración, S.A. ("Repsol") relating to the joint operating agreement governing the Georgetown Block. Repsol has a ninety (90) day option to acquire at least a 10% participating interest in any of the Corentyne Block (100%), the Demerara Block (100%) or the Berbice Block (62%). Repsol will attend the Company's offices in early January to commence due diligence.
- Bridge Loan – With the proceeds of the $7.5 million bridge loan from Pacific Rubiales Energy Corp., the Company will be afforded more time to seek out a joint venture partner for its three blocks.
- Demerara 3D Seismic Survey and Equity Investment – In September 2014, the Company entered into a 3D seismic contract with Prospector PTL Ltd. ("Prospector") to conduct a seismic survey covering more than 3,100 km2 on the Demerara Block. The survey was completed on December 6, 2014 on time and on budget. As part of the transaction, Prospector will be issued 15,534,340 common shares in the capital of CGX Energy resulting in ownership of 16.6% of the Company on a non-diluted basis. As of the date hereof, Prospector owns 9.9% of the Company pending final TSX Venture Exchange approval.
- Rig Sharing Agreement and Rig Contract – In June 2014, the Company and Teikoku Oil (Suriname) Co., Ltd., a wholly-owned subsidiary of INPEX Corporation ("INPEX"), formed a rig sharing group and procured the jack-up drilling rig known as the "Hakuryu-12" rig from Japan Drilling Co. Under the terms of the rig sharing agreement, INPEX will use the Hakuryu-12 rig to drill a well offshore Suriname during the second quarter of 2015 prior to the Company's offshore exploration well on the Corentyne Block.
- Cost Cutting – Since April 2013, the Company has been able to significantly cut monthly general and administrative expenses from approximately $700,000 per month to just above $300,000 per month while continuing to meet its work commitments in Guyana.
At the Company's 100% owned Corentyne Block located offshore Guyana, the Company has procured the Hakuryu-12 jack-up rig and expects to spud its well by October 2015. Thus far, the Company has also procured helicopter services for use in the drillings of this well and completed a shallow hazard survey in order to acquire seabed and drilling hazard information.
CGX Energy recently completed a new 3D seismic survey on its 100% owned offshore Demerara Block and expects the results of the seismic reprocessing to be available by the end of second quarter 2015. With the completion of this survey, the Company now has more than 3,100 km2 of 3D data on the block.
In November 2014, CGX Energy announced it was moving forward with its Initial Period, Phase I commitment on the Berbice Block by acquiring, processing and interpreting 3,000 line kilometers of airborne geophysical data. CGX Energy contracted Sander Geophysics Ltd. to perform the airborne gravity and magnetic survey. This survey will provide CGX Energy with additional data necessary to optimally position its 2D seismic survey which will likely take place in January 2015. The Berbice petroleum prospecting licence governing the block is held by ON Energy Inc., which is 62% owned by CGX Energy.
CGX Energy also announces the granting of incentive stock options to purchase 1,205,000 common shares of the Company to existing directors, officers and employees of the Company, subject to regulatory approval. The stock options were granted on December 19, 2014 pursuant to the Company's stock option plan and are exercisable at a price of $0.32 per share, set to expire on December 19, 2019.
About CGX Energy
CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
This news release contains forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur in the future. These forward-looking statements are based on certain key expectations and assumptions made by CGX Energy. CGX Energy believes the expectations and assumptions on which it develops forward-looking statements are reasonable; however, undue reliance should not be placed on forward-looking statements as there can be no assurance they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. In addition, other risks that may affect the forward-looking statements in this news release are outlined further in the Company's Annual Information Form dated March 5, 2014 filed on SEDAR at www.sedar.com.
The forward-looking statements contained in this news release are made as of the date hereof and CGX Energy undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Image with caption: "Guyana exploration activities (CNW Group/CGX Energy Inc.)". Image available at: http://photos.newswire.ca/images/download/20141219_C6878_PHOTO_EN_9742.jpg
SOURCE: CGX Energy Inc.
For further information: Michael Galego, General Counsel and Secretary at (416) 843-3858, or [email protected]