TORONTO, May 7, 2012 /CNW/ - CGX Energy Inc. (TSX-V - OYL) ("CGX" or the
"Company") announces the results of the drilling of the Eagle-1 well on
the Company's 100% owned and operated Corentyne Petroleum Prospecting
License ("PPL"), offshore Guyana. The Eagle-1 well reached total depth
of 4,328 metres on April 25th in the upper Cretaceous Maastrictian geologic zone on an 8 ½ " diameter
hole and with synthetic oil based mud drilling fluid. During drilling,
the Eagle-1 well encountered oil and gas shows through the objective
Eocene and Maastrichtian geologic zones and at the, yet to be
confirmed, Oligocene zone indicating an active petroleum system where
generated hydrocarbons have migrated through the pre-Miocene section
drilled by the well. Although wire-line logs provided encouraging
results with high resistivities correlating with sandstones that had
encountered oil shows, additional open hole logs were necessary to
determine the nature of the fluids in those zones. Hence, CMR
(combinable magnetic resonance) and MDT (modular formation dynamics)
were run and both logs identified the presence of good quality
sandstone reservoirs that unfortunately proved to be water bearing.
Further analyses will be conducted to verify the geological age of the
drilled section as well as the chemical composition of the recovered
fluids.
The Eagle-1 well was initially budgeted for 60 days of drilling but
experienced weather delays and mechanical issues which extended
operations for approximately an additional 30 days. The initial cost
estimate for the Eagle-1 well was $55 million, however with the delays
the Eagle-1 well is now estimated to cost $71 million. As a result,
the Company will need to raise approximately $20 million in the near
term.
The Jaguar-1 well on the Georgetown PPL in which CGX has a 25% interest
with partners Repsol Exploración S.A (operator), YPF Guyana Limited and
Tullow plc, continues. Total depth for the well is projected at 6,500
metres to test the Turonian geologic zone. The Jaguar-1 well was spud
on February 9, 2012 and is expected to take 180 days. Drilling
operations are progressing as planned.
Kerry Sully, President and CEO, stated, "Although the results of the
Eagle-1 well are disappointing for all stakeholders, this test has
gathered valuable information that will assist CGX with determining the
drilling location for its next well to be drilled on the Corentyne PPL
and for other future targets. The Company's geosciences team has been
interpreting the recently acquired 3D and additional prospects have
been identified. In addition, the team has established that the up-dip
termination of our Eagle Deep Turonian prospect is at a shallower depth
than originally anticipated. Now that the Eagle-1 well has finished
drilling and in response to expressions of interest, CGX is re-opening
the data room to re-start the joint venture process."
CGX Energy is a Canadian-based oil and gas exploration company focused
on the exploration of oil in the Guyana-Suriname Basin, an area ranked
second in the world for oil and gas prospectivity by the United States
Geological Service. CGX is managed by a team of experienced oil and
gas and finance professionals from Guyana, Canada, the United States
and the United Kingdom.
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.
Forward-Looking Statements:
Certain of the statements in this news release may contain
"forward-looking information" within the meaning of applicable
securities law. Forward looking information is frequently characterized
by words such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", "may", "will", "would", "potential",
"proposed" and other similar words, or statements that certain events
or conditions "may" or "will" occur. Forward-looking information is
necessarily based on a number of factors and assumptions that, while
considered reasonable by CGX as of the date hereof, are inherently
subject to significant business, economic and competitive uncertainties
and contingencies. The factors and assumptions of CGX contained in
this news release, which may prove to be incorrect, include that the
drilling operations at the Eagle-1 well on the Corentyne PPL and the
Jaguar-1 well on the Georgetown PPL continue as CGX expects, including
with regard to costs, and other factors and assumptions set out in
CGX's Annual Information Form for th year ended December 31, 2010 (the
"AIF"). Many factors, known and unknown, could cause the actual
results to be materially different from those expressed or implied by
such forward-looking statements. Forward-looking information is based
on the opinions and estimates of management at the date the information
is provided, and is subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those contemplated by the forward-looking information.
Such risks and uncertainties include, but are not limited to, the
inherent risks involved in the exploration and development of oil and
natural gas properties and the possibility of unanticipated costs and
expenses. For a description of the risks and uncertainties facing CGX
and its business and affairs, readers should refer to CGX's AIF and
subsequent Management's Discussion and Analysis. CGX does not intend,
and does not assume any obligation to update forward-looking
information except as required by law. Accordingly, readers are
cautioned not to place undue reliance on forward-looking information.