The Pomeroon License is approximately 11,254 sq km (2,781,000 acres) in size and is located adjacent to CGX's 100% owned Annex portion of the Corentyne License. Water depths in the Pomeroon License range from 20 to 170 meters. The Pomeroon Petroleum Prospecting License has also been extended to November 19, 2009 by the Government of Guyana. During the First Phase of the First Renewal Period terminating May 19, 2005, CGX's work commitment includes reprocessing 330 kilometers of the approximately 6000 kilometers that have been shot on the License, and re-interpreting and integrating regional geological, aeromagnetic, gravity and seep surveys. If CGX elects to renew the License at the end of the First Phase, subsequent work would include new seismic surveys and/or drilling exploration wells. If a significant discovery were made, that portion of the License would be converted to a 25 year Production License.
All conditions precedent to the Purchase and Sale Agreement previously announced on November 13, 2003 have now been satisfied. The terms of the acquisition are that in return for a 100% interest in the Pomeroon License, CGX has agreed to pay to Century Guyana, Ltd. US $150,000 and 2 million common shares of CGX, the issuance of which remains subject to regulatory approval.
With this acquisition, CGX now holds an interest in 9.8 million acres (approximately 40,000 square kilometers) (7.7 million acres net) both onshore and offshore in Guyana. In addition, CGX is also pleased to announce that the term of the original Corentyne License (2.8 million acres) has been extended by the Government of Guyana to June 24, 2011.
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