CGX Energy To Hand Over Up To 4.7% Interest In Corentyne To Frontera
CGX Energy (TSXV: OYL) is again giving up an ownership percentage in the Corentyne block, found offshore of Guyana. As has become customary at the juncture, a portion of ownership in the block has been again handed over to Frontera Energy (TSX: FEC).
The need to provide a larger ownership interest to Frontera comes on the heals of the successful completion of the Wei-1 exploration well. Frontera will be taking up to an additional 4.7% ownership interest in the Corentyne Block as a means of settling additional unexpected costs associated with drilling the well that CGX does not have the funds to cover.
The additional costs are related to the late release of the rig by a third party, drilling of the bypass well, and the costs of a lost sampling tool. The 4.7% in additional ownership will allow for up to $16.5 million in additional costs that will now be covered by Frontera.
If fully transferred, this will reduce CGX’s ownership in the exploration block to just 27.3%, while Frontera will have a 72.7% stake.
CGX maintained a majority interest in the exploration block until July 2022, when it agreed to transfer 34.67% in ownership interest transferred to Frontera in exchange for up to US$130 million in funding for the Wei-1 well, and the settlement of US$29 million in exploration costs related to the Kawa-1 well.
The Wei-1 well was drilled to a depth of 20,450 feet, intersecting 210 feet of hydrocarbon bearing sands in the Santonian horizon in the process.
CGX Energy last traded at $1.03 on the TSX Venture.
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