TORONTO, May 3, 2019 /CNW/ - CGX Energy Inc. (TSXV: OYL)
("CGX") and Frontera Energy Corporation (TSX: FEC)
("Frontera") announced today that the Government of The
Cooperative Republic of Guyana has
approved the farm-in joint venture agreement covering two shallow
water offshore Petroleum Prospecting Licenses in Guyana, the Corentyne and Demerara blocks.
Under the terms of the farm-in joint venture agreement between
Frontera and a wholly owned subsidiary of CGX, CGX Resources Inc.,
Frontera will acquire a 33.333% working interest in the two blocks
in exchanged for a US$33.3 million
signing bonus, paid by way of offset of $24.6 million of debt payable to Frontera by CGX
plus a cash payment of US$8.7 million
paid by Frontera to CGX. Frontera has agreed to pay one-third of
the applicable costs under the joint ventures plus an additional
8.333% of CGX's direct drilling costs for the initial exploratory
commitment wells in the two blocks. CGX is the operator assigned to
the blocks.
Professor Suresh Narine,
Executive Chairman and Executive Director (Guyana), CGX, said:
"CGX is one of the pioneer explorers in the Guyana basin, celebrating its 20th
year in 2018; it is widely regarded as Guyana's indigenous oil company. I would like
to thank the Government of The Cooperative Republic of Guyana for the approval of this pivotal joint
venture by Frontera into the Corentyne and Demerara blocks. Coupled
with the recently concluded successful rights offering financing,
this partnership allows CGX to significantly clean up its balance
sheet and resume with vigor its exploration of the continental
shelf in the Guyana basin. As oil
and gas begins to play a pivotal role in the transformation of The
Cooperative Republic of Guyana,
CGX is delighted to be positioned to claim its place in the
development of Guyana and this
exciting new industry. Frontera has been carefully chosen as a
partner with which CGX will continue to undertake this task:
because of their financial strength, technical capacity and respect
for CGX's culture and its fundamental role in templating good
corporate citizenship and corporate responsibility for E&P
companies operating in The Cooperative Republic of Guyana."
Gabriel de Alba, Chairman of the
Board of Directors of Frontera, added:
"As an important next step of our strategic joint venture with CGX,
we are grateful to have received this approval from the Government
of The Cooperative Republic of Guyana for the development of the Corentyne
and Demerara blocks. Together, our companies are well positioned to
advance exploration and development of these two attractive
blocks in one of the most exciting offshore basins in the
world. The approval of this joint venture confirms CGX's deep
roots in the country, which when combined with Frontera's technical
depth and financial strength create great opportunities for the
benefit of CGX, Frontera and the people of The Cooperative Republic
of Guyana. This joint venture
forms an important part of Frontera's plans to invest in long-term
growth opportunities."
Richard Herbert, Chief Executive
Officer of Frontera, commented:
"We are very excited to be moving forward with our joint venture
partner CGX on this important project for both of our companies and
for the people of The Cooperative Republic of Guyana. Given the strong track record of
discoveries in the adjacent Starbroek block and our own technical
studies of seismic and well data within the two blocks, we are very
encouraged about the opportunity on both the Corentyne and Demerara
Blocks. We look forward to moving into the drilling phase to test
the potential of the two blocks in the coming months."
Corentyne Petroleum Agreement
The Corentyne
block contains 1,125,000 net acres offshore The Cooperative
Republic of Guyana in shallow
water, adjacent to the ExxonMobil Stabroek block, which has
encountered 13 discoveries since May
2015. The Utakwaaka well must be drilled by November 27, 2019 with an additional exploration
well to be drilled by November 27,
2022.
Demerara Petroleum Agreement
The Demerara block
contains 750,000 net acres offshore The Cooperative Republic of
Guyana in shallow water, adjacent
to the ExxonMobil Stabroek block which has encountered 13
discoveries since May 2015. An
exploration well is required to be drilled on the block by
February 12, 2021 with a further
exploration well by February 12,
2023.
About CGX Energy:
CGX Energy is a Canadian-based
oil and gas exploration company focused on the exploration of oil
in the Guyana-Suriname Basin.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
About Frontera:
Frontera Energy Corporation is a
Canadian public company and a leading explorer and producer of
crude oil and natural gas, with operations focused in South America. The Company has a diversified
portfolio of assets with interests in more than 30 exploration and
production blocks. The Company's strategy is focused on sustainable
growth in production and reserves. Frontera is committed to
conducting business safely, in a socially and environmentally
responsible manner. Frontera's common shares trade on the Toronto
Stock Exchange under the ticker symbol "FEC".
If you would like to receive News Releases via e-mail as soon
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Advisories:
Cautionary Note Concerning Forward-Looking
Statements
This news release contains forward-looking statements. All
statements, other than statements of historical fact, that address
activities, events or developments that the Company believes,
expects or anticipates will or may occur in the future (including,
without limitation, exploration and development of the blocks, and
success thereof and CGX obtaining sufficient working capital) are
forward-looking statements. These forward- looking statements
reflect the current expectations or beliefs of Frontera or CGX, as
the case may be, based on information currently available to them.
Forward-looking statements are subject to a number of risks and
uncertainties that may cause actual results to differ materially
from those discussed in the forward-looking statements, and even if
such actual results are realized or substantially realized, there
can be no assurance that they will have the expected consequences
to, or effects on, the applicable company. Factors that could cause
actual results or events to differ materially from current
expectations include, among other things: with respect to CGX (and
as applicable Frontera), complete a financing and successfully
explore and develop the offshore blocks, and unforeseen costs and
expenses; changes in equity and debt markets; perceptions of the
applicable company's prospects and the prospects of the oil and gas
industry in the countries where the company operates or has
investments; and the other risks disclosed in the applicable
continuous disclosure documents under the each company's profile on
SEDAR at www.sedar.com. Any forward-looking statement speaks only
as of the date on which it is made and, except as may be required
by applicable securities laws, each of Frontera and CGX disclaims
any intent or obligation to update any forward- looking statement,
whether as a result of new information, future events or results or
otherwise. Although each of Frontera and CGX believes that the
assumptions inherent in the forward-looking statements applicable
to it are reasonable, forward-looking statements are not guarantees
of future performance and accordingly undue reliance should not be
put on such statements due to the inherent uncertainty
therein.
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SOURCE Frontera Energy Corporation
