A week after noting the Guyana government’s hesitance to give CGX Energy more time to appraise its Wei-1 discovery, Vice President Bharrat Jagdeo elaborated on why.
At a Wednesday press conference, Jagdeo said the company did not give satisfactory answers to the government’s questions. “And that dealt with the ability to finance any future operations and a partner that is of the standing and has the capacity, both financial and otherwise, to implement a project in the future,” Jagdeo said.
He explained that those are just two of the questions the company could not satisfy.
Frontera made a deal with CGX to farm into the Corentyne Block in 2018. The two companies saw their license come to an end last month. A few days before the June 28 expiry date, CGX announced that it submitted a Notice of Potential Commercial Interest in its second Corentyne discovery, at the Wei-1 well. The company wants more time with the license, so it can appraise the find. However, the company’s appraisal of its Kawa-1 discovery did not result in a declaration of commerciality.
Jagdeo has said the government is not inclined to grant CGX’s request.
CGX and Frontera have sought strategic options for the Corentyne Block by engaging Houlihan Lokey, an investment bank. This move included considering a potential farm down of their Corentyne stakes. Based on its most recent public statements on the matter, CGX owns a 27.48% stake in the Corentyne Block, reduced from 66.66% due to multiple deals to secure funding for its obligations. Frontera, initially a minority stakeholder, holds 72.52%.
Frontera has, for some time, substantially footed CGX’s expenses and is now a majority shareholder in both the Corentyne Block and CGX Energy Inc. Frontera was also a CGX partner in the Demerara Block. They relinquished the license in 2022 after not being able to meet its obligations.
