TORONTO, ONTARIO, Mar. 12, 2010 (Marketwire) -- CGX Energy Inc. (TSX VENTURE:OYL.U)(TSX VENTURE:OYL) ("CGX") is pleased to announce that an independent resource assessment (the "Report") has been completed by Gustavson Associates LLC of Boulder, Colorado, U.S.A. (Gustavson) for three prospects on the Company's Corentyne Offshore Petroleum Prospecting Licence (PPL) located offshore Guyana, South America. Using probabilistic analysis, Gustavson calculated a total best estimate (P50) Prospective Resource as of February 1, 2010 in three prospects to be 2.8 billion barrels of oil (see description of Prospective Resource below). The Resource Assessment has been filed on SEDAR (www.sedar.com) and on the Company's website (www.cgxenergy.com).
The Report is limited to an estimate of the potential undiscovered oil and gas prospective resources underlying the Corentyne Offshore PPL that covers approximately 9,180 square kilometres net to CGX. As of February 1, 2010, CGX held an interest in four Petroleum Agreements (PA) covering approximately 34,723 square kilometres gross (approximately 28,197 square kilometres net) offshore and onshore Guyana. Each PA corresponds to a separate Petroleum Prospecting Licence (PPL), with the exception of the Corentyne PA, that is split into three PPL's, the Corentyne Offshore PPL, the Corentyne Annex PPL, and the Berbice Onshore PPL. CGX Energy Inc. has a 100% working interest (WI) in the Corentyne Offshore PPL, the Corentyne Annex PPL and the Pomeroon PPL; a 25% WI in the Georgetown PPL; and a 62% WI in the Berbice PPL through its subsidiary ON Energy Inc.
The Gustavson resource estimates were prepared in accordance with the requirements of Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Capitalized terms related to resource classifications used in this press release are based on the definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook ("COGEH"), 2007.
No commercial discoveries have been made in the offshore Guyana basin and hence there have been no reserves found. Historic well data, regional geology and 2D and 3D seismic were reviewed by Gustavson to prepare a probabilistic Prospective Resource Estimate of that portion of the prospects lying entirely within the Corentyne PPL as shown below.
Prospective Oil Resource
Millions of Barrels
Low Best High
Prospect Estimate Estimate Estimate
Eagle Lower Turonian 187 1,269 3,340
Eagle Upper Turonian 144 1,241 3,949
Eagle Tertiary 67 315 693
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Sum of Prospects 398 2,825 7,982
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As specified in the COGEH, the Sums of Prospects are arithmetic sums, and as such do not represent the same probability levels as the estimates for the individual prospects.
Prospective Resources are those quantities of oil and gas estimated to be potentially recoverable from undiscovered accumulations. If discovered, they would be technically and economically viable to recover. However, there is no certainty that the Prospective Resources will be discovered. In addition, the following mutually exclusive Classification of Resources were used:
Low Estimate - This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P90 confidence level where there is a 90% chance that a successful discovery will be more than this resource estimate.
Best Estimate - This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. This term is a measure of central tendency of the uncertainty distribution and in this case reflects a 50% confidence level where the successful discovery will have a 50% chance of being more than this resource estimate.
High Estimate - This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P10 confidence level where there is a 10% chance that the successful discovery will be more than this resource estimate.
Note that these distributions do not include consideration of the probability of success of discovering and producing commercial quantities of oil, but rather represent the likely distribution of the oil deposits, if discovered.
Gustavson (http://www.gustavson.com/) is a global consulting firm consisting of geologists, geophysicists, engineers, land and contracts managers as well as economists and financial experts who solve problems on all aspects of natural resource evaluations. This work ranges from the first steps of prospecting to design and assessment of production facilities. Gustavson has a 30-year track record of quality consulting to industry and governments worldwide. Specific studies in South America have included reports on "The Petroleum Resource Potential of Brazil", "An Overview of the Geology and Petroleum Resource Potential of Bolivia" and "The Petroleum and Exploration Potential of Argentina". Gustavson have also completed reserve estimates for clients such as the International Finance Corporation, Conoco, Inc., and the Ghana National Petroleum Company, and conducted economic modelling for private clients as part of license rounds in offshore Venezuela. Gustavson have also done extensive work offshore West Africa, including reserves and resource estimates and economic evaluations in Cote d'Ivoire.
Gustavson has acted independently in the preparation of the Report. Gustavson and its employees have no direct or indirect ownership in the property appraised or the area of study described. Ms. Letha Lencioni, P.E., signed off on the Report, which has been prepared by her as a Qualified Reserves Evaluator, with the assistance of others on Gustavson's staff.
With respect to Assumptions and Limiting Conditions within the Report, "This Report is limited to a discussion of the potential undiscovered oil and gas Prospective Resources of the subject property. This Report does not attempt to place a value thereon. Gustavson Associates reserves the right to revise its opinions of reserves and resources, if new information is deemed sufficiently credible to do so. The accuracy of any estimate is a function of available time, data and of geological, engineering and commercial interpretation and judgment. While the resource estimates presented herein are believed to be reasonable, they should be viewed with the understanding that additional analysis or new data may justify their revision and we reserve the right to make such revision."
"We're very happy to have this independent concurrence of our work by Gustavson Associates" stated Warren Workman, Vice President Exploration for CGX. "Subsequent to a prior Report by Gustavson that was filed on January 3, 2008, CGX shot, processed and interpreted 505 square kilometres of 3D seismic yielding better clarity on the geology and extent of the specific Prospects. Our former Eagle Shallow Fan Prospect is now the Eagle Tertiary Prospect. A series of traps in the Upper Cretaceous we called the Eagle Deep West Prospect and Eagle Deep East Prospect are now our Eagle Lower Turonian Prospect, our Eagle Upper Turonian Prospect and our Eagle Campanian Lead. The Eagle well we plan to drill in Q4 2010 will test each of the three Prospects, plus Leads in the Campanian and Maastrichtian. Gustavson has not estimated Prospective Resource for these Leads, nor for additional Leads on the Corentyne Offshore PPL that include the Wishbone Tertiary Lead, and two Leads in the Albian Carbonate, Kabukalli and Crabwood. As interpretation proceeds and new data becomes available, our goal is to upgrade these five Leads to Prospect status. In the January 3, 2008 Report, the Low, Best and High Estimates for the Sum of Prospects were 1.13, 2.75; and 6.23 billion barrels respectively, a similar probability distribution of Prospective Resource as contained in the new Report."
CGX is a Canadian-based oil and gas exploration company focused on exploration for oil in Guyana, South America. CGX is managed by a team of experienced oil and gas and finance professionals from Canada, U.S.A. and the UK. CGX is financed internationally and has thousands of shareholders worldwide.
This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of Management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of CGX Energy Inc. to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of CGX Energy Inc. to fund the capital and operating expenses necessary to achieve the business objectives of CGX Energy Inc., the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by CGX Energy Inc. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of CGX Energy Inc. should not place undue reliance on these forward-looking statements. Statements in relation to "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources described will e discovered and can be profitably produced in the future.
Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements contained in this press release or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
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