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CGX Energy and Frontera Announce Strategic Guyana Joint Venture Agreement
Toronto, Ontario--(Newsfile Corp. - December 4, 2018) - CGX Energy Inc. (TSXV: OYL) (" CGX ") ...
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[{"type":"text","content":"CGX Energy and Frontera Announce Strategic Guyana Joint Venture AgreementRepresents Critical First Step in Recapitalization of CGX and the Advancement of its Exploration Projects in GuyanaToronto, Ontario--(Newsfile Corp. - December 4, 2018) - CGX Energy Inc. (TSXV: OYL) (\"CGX\") and Frontera Energy Corporation (TSX: FEC) (\"Frontera\") announced today that they have entered into a letter agreement to enable CGX to finance the drilling costs related to two shallow water offshore blocks in Guyana, currently 100% owned and operated by a subsidiary of CGX. The agreement also provides financial support as a critical step in a series of transactions that CGX is seeking to undertake in order to restructure its liabilities and provide for sufficient working capital to enable it to advance its offshore exploration projects in Guyana.Under the terms of the letter agreement, Frontera and a wholly owned subsidiary of CGX, CGX Resources Inc., will enter into a farm-in joint venture agreement (the \"JV Agreement\") covering CGX's two shallow water offshore Petroleum Prospecting Licenses in Guyana, the Corentyne and Demerara Blocks. Final approval for the farm-in is required from the Government of Guyana. Upon completion of the agreement and receipt of regulatory approval for the farm-in, Frontera will acquire a 33.33% working interest in the two blocks in exchange for a US$33.3 million signing bonus. Frontera has agreed to pay one-third of the applicable costs plus an additional 8.333% of CGX's direct drilling costs for the initial exploratory commitment wells in the two blocks. CGX would be the operator with assistance from Frontera.Professor Suresh Narine, Executive Chairman and Executive Director (Guyana), CGX, said: \"With the Frontera joint venture, CGX will be positioned to accelerate development of the Corentyne and Demerara Blocks, CGX's two largest offshore concessions. We plan to raise additional capital on a basis that will allow shareholders to participate. Our shareholders, who have supported CGX through its difficult times, will thereby be able to benefit from the exciting opportunities ahead for the company. I'm very optimistic about the future of CGX, our relationship as a commercial partner to Guyana and the value that can be created for our shareholders and stakeholders. CGX is widely held as Guyana's only Indigenous Oil a...