(OYL - TSX-V)
TORONTO, March 21, 2013 /CNW/ - CGX Energy Inc. (OYL - TSXV) ("CGX") announced today that an independent resources evaluation has been completed by DeGolyer and MacNaughton of Dallas, Texas, USA ("D&M") for six prospects on CGX's Corentyne Petroleum Prospecting Licence ("PPL") located offshore Guyana, South America (the "Report"). Using probabilistic analysis, D&M has estimated a total best estimate (P50) Prospective Resources, as of December 31, 2012, for six oil and gas prospects of 779 million barrels of oil, 743 million barrels of condensate, 6,943 billion cubic feet of sales gas plus 696 billion cubic feet of associated solution gas (see description of Prospective Resources below). The Report will be filed on CGX's website (www.cgxenergy.com).
"The work on our Corentyne PPL by DeGolyer and MacNaughton supports the merits of continued exploration in Guyana," stated Kerry Sully, President and CEO. "If the estimate of gas resources were converted to oil on a 6:1 btu equivalence, and if the estimate of solution gas resources associated with the oil prospects were converted to sales gas assuming a 5% shrinkage, the arithmetic sum would be 2,664 million barrels of oil equivalent for best estimate of recoverable prospective oil and condensate plus sales gas resources. This is very close to the estimate for Corentyne of 2,510 million barrels estimate previously reported prior to the drilling of the wells. The Eagle Shallow Eocene prospect has been disproven, but re-interpretation of seismic plus incorporating recent well data has yielded five new prospects. The value per unit of risked resource will be lower given that half of the appraised product is now gas having lower commodity value than either oil or condensate, and the capital and operating costs will be significantly higher than previously estimated because of the very high pressures and temperatures encountered in last year's drilling."
The Report is limited to an estimate of the potential gross undiscovered oil, condensate and gas prospective resources in six prospects underlying the Corentyne PPL. This D&M Prospective Resources Evaluation supersedes all previous resource reports and incorporates all existing and new seismic information and well results to the end of 2012. CGX has a 100% working interest in the Corentyne PPL.
The Report was prepared in accordance with the requirements of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities Section 5.9 ("NI 51-101"). Capitalized terms related to resources classifications used in this press release are based on the definitions and guidelines in Section 5.3.5 of the Canadian Oil and Gas Evaluation Handbook ("COGEH"), Volume 1.
|Gross Prospective Resource Estimate|
|Eagle Deep Campanian||106bbl||29||83||225||109|
|Kabukalli Campanian + Albian||106bbl||207||465||1,085||574|
|Arithmetic Summation Oil||106bbl||274||654||1,559||813|
|Eagle Deep Turonian Gas|
Note: bcf - billion cubic feet; 106bbl - billion cubic feet; Arithmetic Summation may not appear to add due to rounding
The arithmetic summation for oil presented in this table is in compliance with NI 51-101; however, arithmetic summation of probalistic estimates produces invalid results except for the mean estimate.
The following tables relate to the Truncated, Threshold Economic Field Size (TEFS)-Adjusted, and probability of economic success (Pe)-Adjusted Resources. The secondary products of condensate in the case of the Eagle Deep Turonian Gas Prospect and solution gas in the case of the Oil Prospects are not included in the presentation.
Gross Truncated, TEFS-Adjusted Prospective Resources Summary
|Eagle Deep Turonian Gas||Bcf||4,373||7,324||12,611||7,927||0.19||1,496|
|Oil Prospects (statistical aggregate)||106bbls||472||828||1,452||912||0.13||117|
The current exploration portfolio of potential oil and gas accumulations includes six prospects. Four of these prospects were estimated to yield sub-Threshold Economic Field Size (TEFS) quantities or negative potential present worth at 10 percent. For this Report, the four uneconomic prospects have been included in the estimation of portfolio potential gross prospective volumes. However, only Kabukalli Campanian and Eagle Deep Turonian have been included in the estimation of portfolio potential present worth discounted at 10 percent.
Truncated, TEFS and Pe-Adjusted Net Potential NPV at 10% (106 US$)
|Eagle Deep Turonian||$392||$882||$1,980||$1,076|
No commercial discoveries have been made in the offshore Guyana basin and hence there have been no reserves found. Historic well data, regional geology, plus 2D and 3D seismic data were reviewed by D&M to prepare a probabilistic Prospective Resources Estimate of that portion of the prospects lying entirely within the Corentyne PPL. The above tables show the gross truncated, TEFS-Adjusted Prospective Resources expressed in thousands of barrels and Bcf of gas, together with the Net Potential NPV at 10%. These estimates have been adjusted for the probability of geologic and economic success (Pg and Pe).
Prospective Resources are those quantities of oil and gas estimated to be potentially recoverable from undiscovered accumulations. There is no certainty that the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. Application of any geological and economic chance factor does not equate prospective resources to contingent resources or reserves. In addition, the following mutually exclusive Classification of Resources were used:
- Low Estimate - This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P90 confidence level where there is a 90% chance that a successful discovery will be equal to more than this resources estimate.
- Best Estimate - This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. This term is a measure of central tendency of the uncertainty distribution and in this case reflects a 50% confidence level where there is a 50% chance that the successful discovery will be equal to or more than this resources estimate.
- High Estimate - This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P10 confidence level where there is a 10% chance that the successful discovery will be equal to or more than this resources estimate.
D&M (http://www.demac.com/) is a global consulting firm providing a variety of services related to the upstream sector of the petroleum industry, including evaluation of the hydrocarbon potential of exploration areas, estimation and classification of reserves to be recovered from new discoveries, verification of hydrocarbon reserves, production forecasting, and appraisal of properties for prospective acquisition, divestiture, issuance of securities, or financing purposes. The firm offers expertise in the primary scientific specialties related to petroleum evaluation including Evaluation of Prospective Resources.
D&M has acted independently in the preparation of the Report. D&M and its employees have no direct or indirect ownership in the property appraised or the area of study described.
With respect to Assumptions and Limiting Conditions within the Report, the Report is limited to a discussion of the potential undiscovered oil and gas Prospective Resources of the subject property. The Report does not attempt to place a value thereon. D&M reserves the right to revise its opinions of reserves and resources, if new information is deemed sufficiently credible to do so. The accuracy of any estimate is a function of available time, data and of geological, engineering and commercial interpretation and judgment. While the resources estimates presented herein are believed to be reasonable, they should be viewed with the understanding that additional analysis or new data may justify their revision and D&M reserves the right to make such revision.
About CGX Energy
CGX is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin, an area in which the United States Geological Survey estimated a Pmean oil resource potential of 13.6 billion barrels in their Assessment of Undiscovered Conventional Oil and Gas Resources of South America and the Caribbean, 2012. CGX is managed by a team of experienced oil and gas and finance professionals from Guyana, Canada, the United States and the United Kingdom.
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.
Forward Looking Statements:
This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of Management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of CGX Energy Inc. to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of CGX Energy Inc. to fund the capital and operating expenses necessary to achieve the business objectives of CGX Energy Inc., the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by CGX Energy Inc. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of CGX Energy Inc. should not place undue reliance on these forward-looking statements. Statements in relation to "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources described will be discovered and can be profitably produced in the future.
Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements contained in this press release or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
SOURCE: CGX Energy Inc.
For further information: