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Source: Carib News Jan 30

Oil production in Guyana likely by 2014, says analyst

Published on Saturday, January 30, 2010 Email To Friend Print Version

GEORGETOWN, Guyana -- The Canadian-based CGX Energy Inc, which is exploring for oil in Guyana has said that production is likely to begin in four years time as the company continues its setting up of wells in its Corentyne Petroleum Prospecting Licence (PPL).

This was revealed in an analysis “Forging Ahead – Increase Target and Maintain Rating” by a financial services firm, on January 21.

According to Canaccord Adams report, this time span is the “most likely” scenario adding that the Corentyne Licence has the potential for 400 million barrels of crude oil.

It said CGX Energy will be partnering with a major international oil and gas exploration company for the first exploration well in Corentyne, given the major players involved in offshore Guyana and Suriname.

CGX Energy Inc had announced in December that it had recommenced the search for a joint venture partner to participate in Guyana's drilling.

Speaking of investors’ risks, the analyst said an investment in the company’s securities would be speculative.

“This is due to the nature of the company’s involvement in the exploration, the development and production of oil and natural gas and its present stage of development... capital requirements and liquidity risks associated with the exploration, development and production of oil and natural gas from the Guyana assets can contribute to the risks,” the report outlined.

It also said any swing in crude oil and natural gas prices could impact CGX Energy prosperity.

“Any adverse changes to government regulations and fiscal terms could impact CGX Energy’s execution and profitability,” the analyst said, adding that a left- leaning government which can be perceived as less business-friendly could affect the profitability of the company’s operations.

Recently the company had announced its plans to complete the first well by mid-2010.