— seeks alternative approaches due to COVID-19

CGX ENERGY, holder of three oil Block licences in Guyana, is in discussion with the Government of Guyana on the alternative ways it can meet its work commitments, given the effects of the COVID-19 pandemic.

In its unaudited Consolidated Financial Statements for the first quarter of 2020, released on Wednesday, the Company said that many parts of its work have been affected by the travel restrictions and social distancing guidelines, as a result of the virus.

The report stated: “The Company’s operational activities are particularly affected due to the inability of staff to travel because of the closure of borders, especially into and out of Guyana. Furthermore, suppliers of services to the Company are also similarly affected and this may lead to delays in the provision of data and services to the Company’s operational efforts…the Company has been engaged in discussions with the Government of Guyana on alternative approaches to its work commitments in that country, so as to preserve the integrity of its licences.”

The three licences held by the Canadian-based oil and gas exploration company are “New Demerara Petroleum Agreement”, “New Berbice Petroleum Agreement” and “Corentyne Petroleum Agreement” acquired in 2012 and 2013.

In late 2017, as part of the renegotiation of its contract with the Government, CGX Energy relinquished 25 percent of the acreage of both the Corentyne and Demerara blocks.

The new work commitments include drilling an exploration well on the Corentyne Block by November 27, 2019; acquiring additional seismic or conducting seismic reprocessing by November 27, 2020; drilling an exploration well by November 27, 2022 in the Demerara Block; completing any additional data processing and planning and securing all regulatory approvals for the drilling of an exploration well by February 12, 2020.

The Company has also agreed to drill an exploration well by February 12, 2021 and another by February 12, 2023 in the Berbice Block; complete a geochemical survey of a minimum area of 120 square kilometers and commence a seismic programme defined by the aforementioned geochemical survey by February 12, 2020; complete the seismic programme and complete all processing and interpretation of data by August 12, 2021 and drill an exploration well by February 12, 2023.

Providing some of its most recent highlights, CGX Energy said that, on September 23, 2019, the Company contracted PGS Geophysical to provide acquisition and processing of a full broadband marine 3D seismic survey over a northern segment of the Corentyne Block.

The seismic acquisition commenced on October 18, 2019 and was completed on November 2, 2019 and produced seismic data covering approximately 582 km2 of the northern portion of the Corentyne Block. The Company noted that the acquired data is now being processed by PGS.

Now, as a result of the pandemic, CGX Energy has implemented alternative working arrangements for all employees to work from home in Canada, Guyana and the United States and closed all of its offices. Despite the necessary changes, some of the Company’s work is still progressing.

“Due to the nature of the work, which permits social distancing to be preserved, work on the construction of the flood protection barriers at the Company’s deep-water port facility in Berbice, Guyana has continued to progress,” the statement indicated.

“The Company will continue to monitor the COVID-19 related situation and will only fully resume regular activities when there are clear indications that its employees are able to return to work in a safe environment, and in accordance with the advice provided by the regulatory authorities in all of the countries within which CGX Energy operates.”

In the meanwhile, CGX Energy said that itself and its Joint Venture (JV) partner, Frontera Energy Guyana Corp (FEGC), have collaborated with the Institute of Applied Science and Technology (IAST) and Morning Glory Inc. in Guyana to donate 10, 000 boxes of Morning Glory Breakfast cereal to orphanages, regional hospitals, shelters, retirement homes and vulnerable communities in Guyana.

For the three-month period that ended March 31, 2020, the Company improved its working capital deficiency by approximately $200,000 and recorded cash on hand as at March 31, 2020 of $11,907,595.