Monday, March 27, 2023

Liquidation of CGX subsidiary, ON Energy, to have no impact on Guyana operations

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As CGX Energy’s subsidiary, ON Energy, faces liquidation, the process will have no impact on the company’s current operations in Guyana.

“Not at all,” Professor Suresh Narine, Executive Co-Chairman of CGX Energy’s Board of Directors, told OilNOW on Wednesday.

ON Energy announced it is winding up operations in a notice published in the local press on Jan. 24. A meeting is set for Jan. 27 at its office to possibly pass a resolution to wind up the company and nominate liquidator, Harry Noel Narine of the firm PKF, Barecellos, Narine & Co. Chartered Accountants.

“…the company cannot pay its debts and by reason of its liabilities, continue its business,” ON Energy outlined as the reason for its decision.

At the meeting, the Directors will relay ON Energy’s statement of affairs, the list of creditors and the estimated amounts of the claims.

CGX is currently in the process of spudding the Wei-1 prospect in the Corentyne Block. Its other subsidiary Grand Canal Industrial Estates is also working on the Berbice Deep Water Port; dredging and in-river activities are set to begin soon.

ON Energy and Frontera Energy were in control of the Berbice Block, but in September last year, the companies kick-started relinquishment of the block after failing to meet contracted obligations. After September 30, 2022, the companies signed the surrender deed.

The government had cause to warn CGX and Frontera last year to honour contractual obligations for both the Berbice and Demerara licenses after they decided to focus solely on the Corentyne Block. Following the Kawa-1 discovery in the first quarter, CGX had indicated early on to the government that it would not be able to follow through with its commitments on the Demerara and Berbice Blocks. This was primarily due to budget constraints. According to the provisions of its agreements, the partners were expected to drill two wells in Demerara before 2023 and one well along with the acquisition of seismic data in the Berbice concession early this year.

Guyana’s Vice President Dr Bharrat Jagdeo had said that it is “none of our business” if the company “can’t raise the money.”

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