Guyana partners confirm light oil and gas condensate discovery ahead of new well

Joint venture partners CGX Energy and Frontera Energy have confirmed a light oil and gas condensate discovery in their first exploration well on the Corentyne block offshore Guyana, de-risking equivalent oil targets anticipated at its second well on the block expected to be drilled later this year.

Frontera Energy is the majority shareholder of CGX and joint venture partner of CGX in the Petroleum Prospecting License for the Corentyne block offshore Guyana. The two partners announced integrated results from the Kawa-1 exploration well on Monday, confirming a light oil and gas condensate discovery.

The Kawa-1 well was spud in August 2021, using the Maersk Discoverer rig. The well was drilled in a water depth of approximately 355 metres (1,174 ft) to a total depth of 21,578 feet (6,577 metres) in the northern portion of the Corentyne block. Initial results from the well were announced at the end of January 2022, reinforcing the partners’ belief in the potentially transformational opportunity of the investments and interests in Guyana. The two companies then said they would announce additional results upon completion of well activities.

In an update on Monday, the joint venture said it had encountered hydrocarbons in multiple zones extending from 15,216 feet (4,638 metres) in the Maastrichtian to 21,547 feet (6,568 metres) in the Coniacian. Essentially every sand encountered over this interval indicated the presence of hydrocarbons.

A total of 228 feet (69 metres) of net pay was found distributed throughout the Maastrichtian (68 feet/21 metres), Campanian (66 feet/20 metres), Santonian (76 feet/23 metres) and Coniacian (18 feet/5 metres) horizons with individual pay zones up to 35 feet (11 metres) thick.

“The joint venture is pleased to announce that it has successfully discovered light oil in the Santonian and Coniacian and gas condensate in the Maastrichtian and Campanian at the Kawa-1 exploration well, offshore Guyana,” said Gabriel de Alba, Chairman of Frontera’s Board of Directors and Co-Chairman of CGX’s Board of Directors.

“The Kawa-1 discovery adds to the growing success story unfolding offshore Guyana and the integrated Kawa-1 well results further support our belief in the potentially transformational opportunity the joint venture has in one of the most exciting basins in the world.”

Following the completion of drilling activities at the Kawa-1 exploration well, the joint venture engaged independent third-party laboratories and experts to complete detailed studies, refined mapping and analyses to provide opinions on reservoir quality and hydrocarbon type. This integrated analysis has provided further support for the JV’s initial interpretations that the Kawa-1 exploration well successfully discovered light oil in the Santonian and Coniacian and gas condensate in the Maastrichtian and Campanian as supported by cuttings, mud gas and annulus fluid analysis.

Furthermore, these findings are consistent with discovery wells reported by other operators surrounding the northern portion of the Corentyne block and de-risks the forthcoming Wei-1 exploration well, expected to be spud in 3Q 2022.

As a reminder, following initial positive results from the Kawa-1 well, Frontera and CGX decided in February not to move forward with its previous plans for exploration drilling on the Demerara block off Guyana in order to focus on the significant exploration opportunities in the Corentyne block.

When it comes to their second well, the joint venture continues to integrate detailed seismic and lithological analysis and pore pressure studies from the Kawa-1 well into preparations in advance of drilling its second exploration well, called Wei-1, in the third quarter of 2022, subject to rig release from a third-party operator.

The Wei-1 exploration well will be located approximately 14 kilometres northwest of the Kawa-1 exploration well in the Corentyne block, approximately 200 kilometres offshore from Georgetown, Guyana. The exploration well will be drilled in a water depth of approximately 1,912 feet (583 metres) to a targeted total depth of 20,500 (6,248 metres) and will target Campanian and Santonian aged stacked channels in a western channel complex in the northern section of the Corentyne block.

According to the two partners, the information gained at Kawa-1 has improved the chance of success at Wei-1 from 29 per cent to 56 per cent. Data from the Kawa-1 and Wei-1 exploration wells will inform future activities and potential development decisions.

CGX continues to assess several strategic opportunities to obtain additional financing to meet the costs of the drilling programme.

Based on the Kawa-1 discovery and a better understanding of the tie between seismic and rock type in the northern portion of the Corentyne block, the JV has identified additional Maastrichtian, Campanian, and Santonian potential in the central channel complexes between Wei-1 and Kawa-1. The central channel complexes are the focus of ongoing technical work.