CGX seeking more drilling $$ for Kawa-1 in Corentyne block

CGX Energy Inc, the holder of multiple oil and gas exploration licences in the Guyana-Suriname Basin, is seeking more funding for its drilling pursuits at the Kawa-1 exploration well, where, it says, more protracted operations are expected to push costs up.

The Kawa Well is located in the Corentyne Block where CGX is operating alongside its joint venture partner, the Canadian company, Frontera Energy, a petroleum exploration and production company in the business of heavy crude oil and natural gas. Frontera is the majority shareholder in the Petroleum Prospecting Licences for the Corentyne block.

Less, however, is usually said about the Corentyne block than the Stabroek block where the global oil giant ExxonMobil is currently engaged in oil recovery. However, Kawa-1, spudded back in March this year, is also believed to be one of the more exciting exploration wells in the world.

Last week, CGX and Frontera Energy disclosed that they had adjusted their drilling operations schedule for Kawa-1 and that those operations will last longer than expected, increasing the overall cost of the well. While the current estimate for the Kawa-1 operation was initially put at US$90 million, the cost going forward is now reportedly forecast to be approximately US$115-$125 million.

Arising out of this adjusted cost, CGX reportedly may be required to seek additional financing in keeping with the ongoing drilling programme. In this regard, CGX is reportedly assessing several strategic opportunities through which the additional funding may be secured.

A recent report on the Kawa-1 well’s progress up to this time indicates that around 90 per cent of the planned depth has been drilled. The initial results, according to one report indicate that “an active hydrocarbon system is present at the Kawa-1 location. Horizon 19, the first of three geological zones targeted by the JV, has been penetrated.”