CGX finds high quality oil offshore Guyana but uncertain about commercial quantity

Last Updated on Thursday, 4 May 2023, 22:48 by Denis Chabrol

CGX Energy, a Canadian company, has announced that has discovered high quality oil at the Wei-1 well offshore Guyana, but there are no clear indications if the amount of oil will be in commercial quantities as drilling continues.

“A comprehensive logging campaign in the Maastrichtian interval indicated the presence of medium sweet crude oil of 24.9 API. Downhole fluid analysis confirmed light sweet crude oil in the Campanian interval,” the company said in a statement.

CGX added that Logging while drilling (LWD) and cuttings indicated the presence of hydrocarbons in the upper portion of the Santonian; fluid samples have not yet been obtained. Core samples will be attempted in the Santonian interval when drilling resumes.

In terms of the commercial viability of the oil find, the company said it was too early to conclude whether Wei-1 could be commercially developed. “It is not yet certain that the hydrocarbons encountered to date in the Well are yet sufficient to underpin commercial
development on the Northern portion of the Corentyne block,” the company  added.

CGX and its joint venture partner Frontera had planned to drill the well to a total depth of 20,500 feet, but to date has been successfully drilled to a depth of 19,142 feet.

As drilling operations continue, the Joint Venture has revised its Wei-1 total cost estimates to approximately $175-$185 million to successfully reach the target total depth, complete the anticipated logging runs and complete the well.

CGX-Frontera attribute the the increase in cost the delays associated with the late release of the rig by a third-party and adjusting the spud date to January 2023. CGX is required to fund its 32% interest, after partner carry, of approximately $11 to $15 million and is currently
assessing strategies to fulfill this obligation.