CGX Energy announce that an independent resource assessment has been completed by Gustavson Associates LLC of Boulder, Colorado, U.S.A. (Gustavson) for three prospects on the Company's Corentyne Offshore Petroleum Prospecting Licence (PPL) located offshore Guyana, South America. Using probabilistic analysis, Gustavson calculated a total best estimate (P50) Prospective Resource as of February 1, 2010 in three prospects to be 2.8 billion barrels of oil.
The Report is limited to an estimate of the potential undiscovered oil and gas prospective resources underlying the Corentyne Offshore PPL that covers approximately 9,180 square kilometres net to CGX. As of February 1, 2010, CGX held an interest in four Petroleum Agreements (PA) covering approximately 34,723 square kilometres gross (approximately 28,197 square kilometres net) offshore and onshore Guyana. Each PA corresponds to a separate Petroleum Prospecting Licence (PPL), with the exception of the Corentyne PA, that is split into three PPL's, the Corentyne Offshore PPL, the Corentyne Annex PPL, and the Berbice Onshore PPL. CGX Energy Inc. has a 100% working interest (WI) in the Corentyne Offshore PPL, the Corentyne Annex PPL and the Pomeroon PPL; a 25% WI in the Georgetown PPL; and a 62% WI in the Berbice PPL through its subsidiary ON Energy Inc.
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 ("COGEH"), 2007.
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 and 3D seismic were reviewed by Gustavson to prepare a probabilistic Prospective Resource Estimate of that portion of the prospects lying entirely within the Corentyne PPL.
As specified in the COGEH, the Sums of Prospects are arithmetic sums, and as such do not represent the same probability levels as the estimates for the individual prospects.
Prospective Resources are those quantities of oil and gas estimated to be potentially recoverable from undiscovered accumulations. If discovered, they would be technically and economically viable to recover. However, there is no certainty that the Prospective Resources will be discovered. In addition, the following mutually exclusive Classification of Resources were used:
Low Estimate-This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P90 confidence level where there is a 90% chance that a successful discovery will be more than this resource estimate.
Best Estimate-This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. This term is a measure of central tendency of the uncertainty distribution and in this case reflects a 50% confidence level where the successful discovery will have a 50% chance of being more than this resource estimate.
High Estimate-This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P10 confidence level where there is a 10% chance that the successful discovery will be more than this resource estimate.
Note that these distributions do not include consideration of the probability of success of discovering and producing commercial quantities of oil, but rather represent the likely distribution of the oil deposits, if discovered.
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