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It’s been seven long years since Suriname sent out some gun boats and CGX’s little exploration play offshore Guyana ended with a thud. But after all these long years of negotiations and jurisdictional tribunal, the decisions are finally in and the map shows you that CGX Energy got most of what they were hoping for.

We caught up with the very busy Kerry Sully at the Toronto Airport and he send us this comment: 

The Eagle is Soaring

“We finally got the border resolution we wanted. And we only lost about 200,000 acres (out of 9.7 million acres) and kept all of our targets. In press statements, both countries are pleased this issue is behind them.

Having the luxury of seven years to reinterpret our data, our Eagle turbidite target @ 13,000 feet (independent resource estimate 600 million barrels), is now surrounded by a number of eaglets with yet to be determined potential. We will be contracting for a large 3D seismic program shortly, and hope to shoot next spring. We need to get better resolution on Eagle Deep, our new structural target at 16,500 feet.

Several majors expressed an interest in becoming a joint venture partner, so we hope to start that auction shortly. Shareholder interest is soaring. Since last night we’ve probably talked to parties holding about 40% of our stock, and everyone is happy.

Putting a “land value” on the new CGX is a challenge, but a recent analogy is the sale for $145 million by Encana of an average 28% non-operated interest in 10 licences offshore Brazil (1.7 million acres).

We believe our fiscal regime is more attractive, and our targets significantly larger. The CGX team is excited to be going back to work.”

Sully is going to be busy over the next few weeks, but if you are looking to catch his presentation, he will be speaking at the COPIC Conference shortly and then off to Guyana.

GULF SHORES RES. (V-GUL) $0.18 n/c
INTL. FRONTIER RES. (V-IFR) $0.60 +0.05





We’ve had a lot of fun in the North Sea, particularly with stocks such as Oilexco (OIL) and Ithaca Energy (IAE), but the North Sea is still a tough master with cruel seas and the odds of discovery there are still relatively long. While Oilexco has become one of the success stories of the decade, people tend to forget that they have a long list of dry holes as well. Ithaca Energy is so far two for two and in a few weeks, we’ll know if they are three for three...or not.

Meanwhile, the reverse is true that there are more than a few junior companies yet to show any victories for the money spent in the North Sea and two juniors in particular are Gulf Shores Resources and International Frontier Resources are zero for two.

They are zero for two and have left a little bit of a bad taste in some people’s mouths because on their first significant play—the Laurel Valley, folks on the internet knew that the well was a bust before the company ever said anything because they followed ship movements.

Their first play—the Laurel Valley was supposedly a high risk/high reward play and the target was immense. It was a miss.

The second play was natural gas at Lytham and it was supposed to be lower risk, modest reward. It was still a miss.

Sometime in the next four to six weeks, they will be drilling Ridgewood, which is oil and high risk/high reward. They expect a spud date sometime in the next four to six weeks and the target is sizeable enough to suggest that they could have net recoverable to the partners of 180 million barrels, should it be successful.

Lundin Oil along with partners Gulf Shores and International Frontier will be gathering over this coming weekend to set more exact dates and plans and we wouldn’t be surprised to see if another project is added to their portfolio for the last quarter of this year.

Either way, right now both Gulf Shores and International Frontier are cheap stocks and it will be interesting to see when they spud if anyone still cares.

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