CGX Energy Inc. and Frontera Energy Corporation Joint Venture Announce Discovery at Kawa-1 Well, Offshore Guyana

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Kawa-1 well encounters 177 feet (54 meters) of hydrocarbon reservoirs based on logging while drilling

Announces Commitment to Drill a Second Well on the Corentyne Block in the Second Half of 2022 Using Maersk Discoverer

Toronto, Ontario–(Newsfile Corp. – January 31, 2022) – CGX Energy Inc. (TSXV:OYL) (“CGX”) and Frontera Energy Corporation (TSX:FEC) (“Frontera”), the majority shareholder of CGX and joint venture (the “joint venture“) partner of CGX in the oil exploration license for the Corentyne Block offshore Guyana, announced today that the joint venture has made a discovery at the Kawa-1 well, in the Corentyne Block.

Gabriel de Alba, Chairman of the Board of Frontera and Co-Chairman of the Board of CGX, said:

“Initial results from the Kawa-1 well are positive and reinforce CGX and Frontera’s belief in the potentially transformative opportunity that our investments and interests in Guyana present for our businesses and the country. The Kawa-1 results add to the growing success story unfolding off Guyana. as the country emerges as a global oil and gas exploration hotspot. On behalf of the joint venture, I would like to thank the government of Guyana for its longstanding support as we worked together to achieve this successful outcome.

The Kawa-1 well encountered approximately 177 feet (54 meters) of hydrocarbon-bearing reservoirs in the Maastrichtian, Campanian and Santonian horizons based on initial evaluation of log-while-drilling (LWD) data. These intervals are similar in age and can be correlated using regional seismic data to recent successes from 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 may become the target of future appraisal opportunities. Net compensation and fluid properties of hydrocarbons in shallow and deep reservoirs will now be confirmed by wireline logging and fluid sampling, with results to be released as soon as possible.

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

Results from Kawa-1 support the joint venture’s geological and geophysical models and have helped reduce the risk of equivalent targets in other parts of the Corentyne license area. Completion of well forecasts is currently scheduled for the end of February 2022. Information on final well cost estimates and additional results will be announced upon completion of completion of well activities.

CGX is currently evaluating several strategic opportunities to obtain additional financing to cover the costs of the drilling program.

Professor Suresh Narine, Executive Co-Chairman of CGX’s Board of Directors, said:

The results from the Kawa-1 well represent a positive step in CGX’s journey as a pioneer in oil and gas exploration in the Guyana Basin. Together with our partner Frontera, CGX looks forward to continuing its socially and environmentally responsible approach to the development of Guyana’s oil and gas industry and port infrastructure. We are proud of our long partnership with the government and people of Guyana and our reputation as Guyana’s indigenous oil company. »

Orlando Cabrales, CEO of Frontera, said:

“We are very pleased to have successfully drilled the Kawa-1 well with our partner CGX. I salute the tremendous efforts of all the talented employees and contractors involved and their dedication in helping this partnership reach this important milestone. We we now have the ability to focus our efforts on potentially transformative opportunities and continue our positive relationships with the government and people of Guyana.”

A second exploration well will be drilled on Corentyne

Building on its recent positive offshore results at the Kawa-1 exploration well, the joint venture plans to launch its second commitment well, called Wei-1, in the northwest portion of the Corentyne block in the second half of the year. 2022.

The joint venture has exercised its option to use the Maersk Discoverer semi-submersible mobile drilling rig for the Wei-1 well. This is an important step from a health and safety, efficiency and operational perspective, which will both maintain the continuity of the exploration program during a period of high demand in region and consistency of work with a team familiar with the platform.

The Wei-1 exploration well will target stacked channels of Campanian and Santonian age within the western cone complex in the northern part of the Corentyne block. The Wei-1 well is named after one of the highest peaks in the Pakaraima mountain range, which provides stunning visibility of the surrounding terrain. Wei Tepu was historically used as a sentry post by the people of Patamona to guard against attacks.

Figure 1

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About CGX:

CGX is a Canada-based oil and gas exploration company focused on oil exploration in the Guyana-Suriname Basin and the development of a deepwater port in Berbice, Guyana.

About Frontera:

Frontera is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in upstream and midstream facilities. Frontera has a diversified portfolio of assets with interests in 34 exploration and production blocks in Colombia, Ecuador and Guyana, as well as pipelines and port facilities in Colombia. Frontera is committed to conducting its business safely and in a socially, environmentally and ethically responsible manner.

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Opinion:

Caution Regarding Forward-Looking Information

This press release contains forward-looking information within the meaning of Canadian securities laws. Forward-looking information relates to activities, events or developments that CGX and Frontera believe are expected or anticipate to occur or may occur in the future (including, without limitation, statements regarding expected completion of well activities, including test results and timing of well costs; advancement of local partnerships; acceleration of regional exploration projects; development of physical infrastructure assets and CGX’s requirement to obtain additional funding). All information other than historical facts is forward-looking information.

Forward-looking information reflects the current expectations, assumptions and beliefs of CGX and Frontera based on information currently available to them and takes into account their experience and perception of historical trends, including expectations and assumptions relating to commodity prices. and interest and exchange rates; performance of assets and equipment; the adequacy of budgeted capital expenditures for carrying out planned activities; the availability and cost of labour, services and infrastructure; and project development and execution.

Although CGX and Frontera believe that the assumptions inherent in forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and, accordingly, undue reliance should not be placed on such information. Forward-looking information is subject to a number of risks and uncertainties, some of which are similar to those of other oil and gas companies and some of which are unique to CGX or Frontera. Actual results may differ materially from those expressed or implied by the forward-looking information, and even if such actual results are achieved or materially achieved, there can be no assurance that they will have the anticipated consequences or effects on CGX or Frontier. Factors that could cause actual results or events to differ materially from current expectations include, among others: market price volatility for oil and natural gas (including due to a volatile oil price environment due to the COVID-19 pandemic and the actions of OPEC and non-OPEC countries and restrictions imposed by governments in response thereto); the duration and spread of the COVID-19 pandemic and its severity; the success of CGX’s and Frontera’s programs to manage COVID-19; uncertainties associated with estimating and determining oil and natural gas reserves and resources; liabilities inherent in the exploration, development, exploitation and recovery of oil and natural gas; the ability of CGX and Frontera to access additional financing; CGX’s and Frontera’s ability to: meet financial obligations and minimum covenants, fund capital expenditures and comply with covenants contained in agreements that govern indebtedness; political developments in the countries where CGX and Frontera operate; uncertainties related to the interpretation of drill results and other geological data; geological, engineering, drilling and processing issues. Documents filed by CGX and Frontera from time to time with securities regulatory authorities (including Annual Information Forms for Fiscal 2020) describe the risks, uncertainties, material assumptions and other factors that could affect actual results and such factors are incorporated herein by reference. Copies of these documents are available without modification by reference to the respective profiles of CGX and Frontera on SEDAR at www.sedar.com. All forward-looking information speaks only as of the date on which it is made and, except as required by applicable securities laws, CGX and Frontera disclaim any intention or obligation to update any forward-looking information, whether whether as a result of future or other new information, events or results.

For more information, please contact: Todd Durkee, Vice President, Development, CGX, 832-300-3200, www.cgxenergy.com or Brent Anderson, Director, Investor Relations, Frontera, 403-705-8827, [email protected], www.fronteraenergie.ca.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/112244

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