CGX Energy (TSXV: OYL) and Frontera Energy (TSX: FEC) appear to have lost a major asset in Guyana. The companies, whom have a joint venture on a license within the country, have seen the government revoke the license that is currently in place.
The license, which refers to a petroleum prospecting license for the Corentyne Block which is located offshore of Guyana, is said to have been terminated by the Government of Guyana. In a letter provided to the two firms the government further stated in the event that it has been determined the license has continued the letter serves as a 30-day notice of the governments intent to cancel the license.
As a result, any license that may be in place will be deemed to have been cancelled as of March 10.
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The letter goes on to further state that “there are no reasonable grounds to grant any extensions to the joint venture,” however the duo has until February 22 to submit any documentation that may change the governments opinion.
The joint venture has indicated that it remains of the position that the license is in place and good standing, and that the arrangement in place with the Government of Guyana remains in place. Legal options are currently be assessed to determine how to proceed.
The joint venture, which has been in place since January 2019 between CGX and Frontera, is currently 27.48% owned by CGX, and 72.52% owned by Frontera. To date two wells, Kawa-1 and Wei-1, have been drilled within the block, however no production has yet come from the license area.
CGX Energy last traded at $0.155 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
