Exploration hotspot – Guyana well results reinforce belief in ‘transformational opportunity’

CGX Energy and Frontera Energy have made a discovery at the Kawa-1 well located on the Corentyne block offshore Guyana, reinforcing the belief in the potentially transformational opportunity for the JV in the country. The two have now also committed to drill the second well on the block in the second half of the 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 Kawa-1 well was spud in August 2021, using the Maersk Discoverer semi-submersible rig. The JV believed it to be one of the most exciting exploration wells in the world. By September 2021, the well was on track to reach the total depth with the well results being consistent with pre-drill geological and geophysical expectations. However, plans changed in December as drilling operations were expected to last longer than expected, increasing the overall cost of the well.

The JV partners announced the discovery on Monday. According to the partners, the Kawa-1 well has encountered approximately 177 feet (54 metres) of hydrocarbon-bearing reservoirs within Maastrichtian, Campanian and Santonian horizons based on initial evaluation of Logging While Drilling (LWD) data. These intervals are similar in age and can be correlated using regional seismic data to recent successes in Block 58 in Suriname and Stabroek Block in Guyana.

The well also encountered hydrocarbon-bearing sands in deeper strata (Coniacian or older) which will also be analyzed and could become the target of future appraisal opportunities. The net pay and fluid properties of the hydrocarbons across the shallow and deep reservoirs will now be confirmed with electric wireline logging and fluid sampling, with results to be disclosed as soon as practicable.

The Kawa-1 well was drilled to a depth of 21,578 feet (6,578 metres) and targeted the easternmost Campanian and Santonian channel/lobe complex on the northern section of the Corentyne block.

Gabriel de Alba, Chairman of Frontera’s Board of Directors and Co-Chairman of CGX’s Board of Directors, commented: “Initial results from the Kawa-1 well are positive and reinforce CGX and Frontera’s belief in the potentially transformational opportunity our investments and interests in Guyana present for our companies and the country. Kawa-1 results add to the growing success story unfolding in offshore Guyana as the country emerges as a global oil and gas exploration hotspot.”

The Kawa-1 results support the Joint Venture’s geological and geophysical models and have helped de-risk equivalent targets in other parts of the Corentyne license area. The end of well forecast is currently projected to be the end of February 2022. Information on final well cost estimates and additional results will be announced upon completion of well activities.

CGX is currently assessing several strategic opportunities to obtain additional financing to meet the costs of the drilling programme. To remind, the initial cost estimate for the well was $90 million, which in December changed to $115-$125 million.

Building on the success of the Kawa-1 exploration well, the Joint Venture anticipates spudding its second commitment well, called Wei-1, in the northwestern part of the Corentyne block in the second half of 2022.

The Joint Venture has exercised its option to use the Maersk Discoverer semi-submersible drilling rig for the Wei-1 well. The JV noted that this will 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 Wei-1 exploration well will target Campanian and Santonian aged stacked channels in the western fan complex in the northern section of the Corentyne block. The well is named after one of the tallest peaks in the Pakaraima mountain range, which has commanding visibility over the surrounding terrain. Wei Tepu was historically used as a sentinel post by the Patamona People to guard against attacks.