Jov Onsat- Frontera Energy Corp. and its majority-held co-venturer CGX Energy Inc. have announced their second oil discovery in the Corentyne block offshore Guyana.
“The Wei-1 well encountered 210 feet of hydrocarbon bearing sands in the Santonian horizon”, the partners said in a joint press release last Wednesday.
Drilling, however, failed to obtain oil samples due to a tool failure.
“The rock and fluid properties of the Santonian will now be analyzed by an independent third-party laboratory over the next 2-3 months to define net pay and a basis for the evaluation of this interval”, they said.
This is the partners’ second discovery in the block, about 124.27 miles from the capital Georgetown. CGX and Frontera announced last year drilling at the Kawa-1 well found commercially viable light oil and gas condensate volumes. “The Kawa-1 discovery adds to the growing success story unfolding offshore Guyana and the integrated Kawa-1 well results further support our belief in the potentially transformational opportunity the Joint Venture has in one of the most exciting basins in the world”, Gabriel de Alba, chair of Frontera’s board of directors and co-chair of CGX’s board of directors, said May 9, 2022 in a media statement.
The partners initially posted 228 feet of net pay but have cut that to 77 feet.
In February Frontera completed the relinquishment of the Demerara block following a deal with the Guyanese government, saying the move would allow it to focus on Corentyne. “It was important to us, as partners to the Government of Guyana, to positively resolve our desire to focus on Corentyne and not allow the Demerara block to be delayed in terms of assessing its potential”, Frontera chief executive Orlando Cabrales said in a release June 16, 2022.
In December CGX and Frontera said they were restructuring their joint venture to give the latter a 68 percent stake and the former 32 percent.
“As part of the JOA [Joint Operating Agreement] Amendment, pending the filing of customary documentation with the Government of Guyana, CGX transferred 29.73% of its participating interest in the Corentyne block to Frontera in exchange for Frontera funding the Joint Venture’s costs associated with the Wei-1 well for up to $130 million and up to an additional $29 million of certain Kawa-1 exploration well, Wei-1 pre-drill, and other costs”, they said in a joint statement December 1, 2022.
“In addition, CGX assigned 4.94% of its participating interest, pending the filing of customary documentation with the Government of Guyana, in the Corentyne block to Frontera as consideration for the repayment of the outstanding principal amounts under the previously announced US$19 million convertible loan to CGX dated May 28, 2021, as amended, and the previously announced US$35 million convertible loan to CGX dated March 10, 2022, as amended, and a cash payment of US$3.8 million.”
Corentyne borders the southern tip of the Stabroek block, where co-venturers Hess Corp. and ExxonMobil Corp. made two discoveries this year in the Lancetfish-1 and Fangtooth SE-1 wells. In 2022 nine discoveries were made on Stabroek, where Hess has a 30 percent stake, operator ExxonMobil holds 45 percent and CNOOC Petroleum Guyana Ltd. owns 25 percent.
The recent discoveries will further the oil boom in Guyana, which has emerged from being one of South America’s poorest to being one of the world’s fastest-growing economies. The World Bank expects real gross domestic product to have grown 57.8 percent last year primarily due to an expansion in oil production. (rigzone.com)
