ON, an 84.6% subsidiary of CGX, holds a 100% interest in the 800,000 acre Berbice Block. Over the last year, a 3-stage exploration program combining aero-mag data, geo-chemical analysis and recently, a 2-D seismic program has confirmed a number of drillable structural and stratigraphic trap anomalies. Very good quality seismic data was obtained in the program completed in June 2004.
An initial program of at least 3 exploratory wells has been chosen based on technical merit and access considerations. Contingent on drilling success and final costs, the drilling program could be expanded to test other anomalies. Planning is well underway for the drilling operations scheduled to commence in the fourth quarter.
Warren Workman, VP Exploration for CGX and President of ON commented, "Our 2D seismic program has confirmed potential hydrocarbon traps tied to basement highs and the unconformity related traps in the Lower Tertiary overlying the Cretaceous. This is consistent with the trapping mechanisms in the nearest oil field, Tambaredjo, 200 kilometers to the east in Suriname. Tambaredjo is a shallow field at approximately 1000 feet, with 900 million barrels of heavy oil-in-place of which recoverable reserves are estimated to be 170 million barrels. In the Berbice Block, we are seeing deeper targets in the 3000 - 6000 foot range from equivalent horizons. Further, new geochemical analysis by GeoMicrobial Technologies of Oklahoma has concluded that based on fluorescence, potential oil in the Berbice Block is likely significantly lighter than in Tambaredjo."
Kerry Sully, President of CGX cautions, "We are excited about this opportunity because of the strong analogies to Tambaredjo and Calcutta in Suriname, the positive geo-chem analysis and the recent seismic program. However, as there have been no hydrocarbon reservoirs discovered in Guyana, the risk of finding commercial deposits of petroleum remains high."
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