CGX Energy Inc. has announce that an independent resource assessment has been completed by Gustavson Associates LLC of Boulder, Colorado, U.S.A. for four prospects on the Company's Corentyne Petroleum Prospecting License (PPL) located offshore Guyana, South America.
Using probabilistic analysis, Gustavson calculated a total best estimate (P50) Prospective Resource in the four prospects to be 2.7 billion barrels of oil (see description of Prospective Resource below). The Resource Assessment has been filed on SEDAR and on the Company's website.
Gustavson was retained by CGX to prepare the Report to estimate the potential undiscovered oil and gas resources underlying the 9,170 square kilometre offshore portion of the Corentyne PPL in which CGX has a 100% working interest. The Report did not review CGX's 25% interest in the 9,742 square kilometre Georgetown PPL, its 100% interest in the 3,968 square kilometre Corentyne Annex nor its 100% interest in the 11,400 square kilometre Pomeroon PPL. The Gustavson resource estimates were prepared in accordance with the requirements of Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Capitalized terms related to resource classifications used in this press release are based on the definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook.
No commercial discoveries have been made in the offshore Guyana basin and hence there have been no reserves found. Historic well data, regional geology and 2D seismic were reviewed by Gustavson to prepare a probabilistic Resource Estimate of that portion of the prospects lying entirely within the Corentyne PPL as shown below.
The conclusions from the scenario analysis were the statistical or risked Expected Value for the development of just two of the prospects on the Corentyne PPL is $4.8 billion at a 10% discount rate and $2.4 billion at a 20% discount rate. The range of unrisked net present values at a 10% discount rate for the four scenarios is from ($104) million to $23.6 billion. The Expected Value is the combination of the unrisked best estimate resource net present value and the associated probability of success. It should be noted that estimated values disclosed do not represent fair market value.
"We're very happy to have this independent concurrence of our work by Gustavson Associates" stated Kerry Sully, President and CEO of CGX. "While waiting for the resolution of the maritime border between Guyana and Suriname, Warren Workman, our Vice President of Exploration, worked extensively with Geoseis Inc. to re-interpret the Guyana Suriname basin offshore Guyana. The most significant lead has been a series of structural traps in the Upper Cretaceous that we've called our Eagle Deep targets within our Corentyne PPL. These are basin opener plays and we look forward to further refinement of our interpretation with 3D seismic, and testing of our concepts by drilling as soon as possible thereafter."
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