CGX Energy Expects Guyana Drilling Costs to Increase

CGX Energy and its 62% Guyanese subsidiary ON Energy Inc. report that the original budget for the onshore drilling program will be exceeded by the time the third well, Albion, is drilled to total depth of 6,000 feet. Surface casing has just been set on the Albion well at 1,830 feet and drilling is expected to be completed within the next 10 to 14 days.

Warren Workman, Vice-President of CGX and President of ON Energy stated "If upon the completion of drilling the Albion well, the results of the well are not significantly encouraging, the drill rig will be released back to Trinidad. The rig arrived in Guyana on May 6, 2005 for a four well program expected to last 80 days. Unloading equipment, transferring it between well sites and drilling have taken significantly longer than our prognosis, thereby leading to increased costs. If the Albion well proves to be successful, we will secure a service rig and test equipment in order to assess the well's potential commerciality. We will also need to integrate the well data with our recent seismic and geochem to enhance our interpretation of the area, such that a decision on advancing to the fourth location can be made. ON Energy will require additional funding in either case."

Updating CGX Energy's offshore operations, Kerry Sully, President of CGX stated that, "In the offshore, during the last 9 months we have made significant progress in the re-interpretation of seismic in the Pomeroon, Annex, Georgetown and Corentyne Licenses. As progress is made on maritime border resolution, we will pursue strategies that could align us with major joint venture partners such that when a border is resolved, we will be prepared to pursue drilling at the earliest possible date."