Frontera says it already sunk US$400M into two Guyana wells, US$40M on CGX port facility

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Frontera Energy Corporation recently revealed to its investors that it has sunk approximately US$440 million into Guyana. During its 2023 second-quarter earnings update, executives told shareholders that US$400 million pertains to two wells in the Corentyne Block while the remainder is for external investments for a Guyana port facility being established by its partner, CGX Energy Inc.

These revelations were made following shareholder queries about the extent of investments made to date. Specifically, Christine Guerrero, formerly of Chevron and Hess Corporation, and now with Brickhouse Ventures, LLC, posed several questions about Frontera’s recoverable investments in the Corentyne Block. Guerrero also queried how soon the operator would progress to a production licence following the announcement of a discovery at the Wei-1 well.

Frontera’s Chief Financial Officer (CFO), René Burgos noted that US$440 million has been expended since its partnership with CGX. The official said, “…we (have) roughly US$440 million of equity in Guyana, which includes, I would say, roughly US$400 million of investments in our two wells, which are the Wei-1 and the Kawa-1 well, and there will be other external investments related to the port…”

Frontera eats up more of CGX’s shares in Corentyne Block to offset increased costs for Wei-1 drilling | OilNOW

Guerrero was keen to note that her question regarding the recoverability of investments was prompted by a statement that was made earlier this year by CGX CEO, Professor Suresh Narine, that over US$700 million was invested in Guyana by the Canadian duo. The comment in question was made at the International Energy Conference in Guyana. “I’m trying to figure out what portion of the US$700 million goes to Corentyne,” the shareholder said.

Burgos made a commitment to review that number internally and update investors accordingly.

Tackling the second concern on production was Frontera’s Chief Executive Officer (CEO), Orlando Cabrales. “…As we said, we are, I mean, analyzing the significant amount of data that we got on the well. So, that will take, as was indicated before, like a couple of months. So, that will create a better perspective on the block, on the potential of the block and how to move into the forward basis to say something more,” Cabrales said.

CGX may drill more wells at Corentyne Block after Wei-1 | OilNOW 

Frontera currently holds a 72.7% Participating Interest in Guyana’s Corentyne Block as per an amended Joint Operating Agreement with CGX.

The Canadian companies have thus far complied with the exploration requirements for the block with the drilling of the Kawa and Wei-1 wells.

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