Guyana partners have a change of heart when it comes to drilling plans

A joint venture between Frontera Energy and CGX Energy has decided not to move forward with its previous plans for exploration drilling on the Demerara block off Guyana following positive results from its well on the Corentyne block.

CGX Energy and Frontera Energy, the majority shareholder of CGX and joint venture partner of CGX, informed on Monday that the JV will focus on the significant exploration opportunities in the Corentyne block and will not engage in drilling activities on the Demerara block in 2022.

The decision was a result of the initial positive results at the Kawa-1 exploration well on the Corentyne block, the duo explained. It is worth noting here that, upon announcing the results from Kawa-1 well at the beginning of the month, the JV also said it would spud its second commitment well, called Wei-1, in the northwestern part of the Corentyne block in the second half of 2022.

Maersk Drilling’s recent fleet status report shows that the contract for the Maersk Discoverer rig, which was used to drill the Kawa-1 well, has been extended by CGX in Guyana and it will run from September until November 2022. CGX previously confirmed it had exercised its option for the rig, in an effort to maintain continuity in the exploration program during a period of high demand in the region and consistency in working with a team familiar with the rig.

The plans for the Demerara block, which are no longer valid, were previously revealed in February 2021. A total of 32 prospects were identified in JV’s Guyana blocks, of which 27 in the Corentyne block and 5 in the Demerara block. At the time, preparatory work was being done for the Demerara block’s Makarapan-1 exploration well, an Aptian stratigraphic prospect on the block.

Following negotiations with the government of Guyana, the JV last February also extended the then existing 12 February 2021 deadline for drilling the next well on the block to 11 February 2022. This extension has now expired.

Therefore, the joint venture is currently engaged in discussions with the government regarding the Demerara block and will provide an update on such discussions as soon as a conclusion has been reached.

According to the JV, Kawa-1 well early-stage wireline logging results confirm the logging while drilling (LWD) indications previously disclosed in January 2022 with a total of 200 feet of net pay encountered at multiple depths.

The JV said it will provide an update when further analyses of logs and samples, which are currently ongoing, are complete.