Frontera Energy Corp. and its majority shareholder CGX Energy Inc. have announced their second oil discovery in the Corentyne block offshore Guyana.
“The Wei-1 well encountered 210 feet of oil-bearing sands in the Santoni horizon,” the partners said in a joint press release Wednesday.
However, the drill was unable to obtain oil samples due to a tool failure.
“The rock and fluid properties of the Santonian will now be analyzed by an independent independent laboratory over the next 2-3 months to define the net pay and a basis for the evaluation of this interval,” they said.
This is the partners’ second discovery in the block, about 124.27 miles from the capital Georgetown. CGX and Frontera last year announced the drilling of the Kawa-1 well that found commercially viable volumes of light oil and gas condensates. “The discovery of Kawa-1 adds to the growing success story being developed offshore Guyana and the integrated results of the Kawa-1 well further support our belief in the potentially transformative opportunity that the Joint Venture in one of the most exciting basins in the world,” Gabriel de Alba, Chairman of the Board of Directors of Frontera and Co-Chairman of the Board of Directors of CGX, said on May 9, 2022, in a media release.
The partners initially posted 228 feet of net pay, but have reduced that to 77 feet.
In February, Frontera completed the relinquishment of the Demerara block following an agreement with the Guyana government, saying the move would allow it to focus on Corentyne. “It was important for us, as partners of the Government of Guyana, to positively resolve our desire to focus on Corentyne and not allow the Demerara block to be delayed in terms of assessing its potential,” the councilor said representative of Frontera, Orlando Cabrales, in a statement. June 16, 2022.
In December, CGX and Frontera said they were restructuring their joint venture to give the latter a 68% stake and the former a 32% stake.
“As part of the JOA [Joint Operating Agreement] Amendment, pending the filing of the usual paperwork with the Government of Guyana, CGX transferred its 29.73% stake in the Corentyne block to Frontera in exchange for Frontera funding the costs of the joint venture associated with the Wei-1 well for up to $130 million and up to an additional $29 million from certain Kawa-1 exploration wells, Wei-1 pre-drilling and other costs,” they said in a joint statement ‘December 1, 2022. “In addition, CGX allocated 4.94% of its interest, pending the filing of the usual documentation with the Government of Guyana, in the Corentyne block in Frontera as consideration for the repayment of principal amounts outstanding under the previously announced US$19 million convertible loan on CGX dated May 28, 2021, as amended, and the previously announced US$35 million convertible loan USA to CGX dated March 10, 2022, as amended, and a cash payment of $3.8 million.
Corentyne borders the southern end of the Stabroek block, where partners Hess Corp. and ExxonMobil Corp. they made two discoveries this year in the Lancetfish-1 and Fangtooth SE-1 wells. Nine discoveries were made in 2022 at Stabroek, where Hess has a 30 percent stake, operator ExxonMobil has 45 percent and CNOOC Petroleum Guyana Ltd. 25 percent.
The recent discoveries will fuel the oil boom in Guyana, which has gone from one of the poorest economies in South America to one of the fastest growing economies in the world. The World Bank expects real gross domestic product to have grown 57.8 percent last year, mainly due to expanding oil production.
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