CGX well offshore Guyana non-commercial

Offshore staff

TORONTO, Canada – CGX Energy’s Eagle-1 well off Guyana failed to find commercial hydrocarbons.

The well was drilled on the Corentyne Petroleum Prospecting License. It reached TD of 4,328 m (14,200 ft) in the upper Cretaceous Maastrictian geologic zone on an 8 ½ -in. diameter hole, using synthetic oil-based mud drilling fluid.

Eagle-1 well encountered oil and gas shows through the objective Eocene and Maastrichtian geologic zones and, probably also in the Oligocene, although this is yet to be confirmed. Unfortunately, logs confirmed that the sandstone reservoirs were water-bearing.

However, CGX (TSX-V - OYL) says the result indicates an active petroleum system where generated hydrocarbons have migrated through the pre-Miocene section drilled by the well.

The company had budgeted for a 60-day drilling program, but weather delays and mechanical extended by a further 30 days, pushing the estimated cost of up from the budgeted $55 million to $71 million.  As a result, CGX will need to raise around $20 million of extra funds in the near term.

5/14/2012

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