ON Energy about to dissolve, owes CGX US$3 million

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OilNOW
OilNOW
OilNOW is an online-based Information and Resource Centre

ON Energy Inc., a company registered in Guyana, is preparing to dissolve and owes its parent company CGX Energy Inc. US$3 million. But the company is now unable to pay its debts.

ON had held a license for the Berbice block, onshore Guyana, which it recently relinquished.

CGX Energy Inc., which is the operator of the Corentyne block and is currently engaged in the drilling of the Wei-1 well, owns 62.5% of the company. 

OilNOW understands that CGX Energy Inc. is the sole creditor of ON Energy Inc., as CGX has solely paid the expenses of ON Energy Inc. for more than a decade. 

OilNOW was reliably informed that in June 2022, the Chief Financial Officer of CGX informed ON Energy Inc. that CGX will not continue to fund the work requirements on the Berbice block.  

In May 2022, the Guyana High Court of Judicature denied an application by ON Energy Inc. to sanction a proposed scheme to reduce the company’s share capital and cancel and extinguish shares held in ON Energy by GGC Resources Inc. Over several years, ON Energy Inc. and regulatory agencies in Guyana have advertised in the local newspapers for the beneficial owners of GGC Resources Inc. to come forward and be identified. They have yet to do so.

ON Energy is currently prevented from conducting its business with the Guyana Geology and Mines Commission and financial institutions due to its inability and that of regulatory authorities to identify the beneficial owners of GGC Resources Inc., which owns 63,810,000 ordinary shares of the company.  

Minister of Natural Resources, Vickram Bharrat in February 2022 informed ON Energy that it must drill one commitment well and acquire seismic on the Berbice block prior to February 2023.  Presumably, the company informed the minister of its intention to relinquish the Berbice block as it was unable to conduct business due to the inability to identify the beneficial owners of GGC Resources Inc.

CGX Energy Inc., following its discovery of light oil and condensate in its Corentyne block, took a strategic decision to focus its operational efforts and finances on the Wei-1 well and the highly prospective northern section of the Corentyne block, immediately adjacent to the prolific Stabroek block in the Guyana basin. 

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