October 10, 2001 press release
Link:
cgxenergy.com
CGX Completes Initial Canadian Drilling Program
October 10, 2001 - As follow up to its previously announced Western Canada drilling program during the third quarter of 2001, CGX is pleased to report on its drill results for the program. CGX participated in the drilling and casing of six wells in Alberta, resulting in one light oil well, one heavy oil well, one heavy oil and gas well, and three gas wells. Extended testing has begun or will begin shortly, followed by pipeline tie-in of each of the wells. As stated previously, CGX is taking advantage of current market conditions and utilizing its strong management expertise in the development of oil and gas opportunities in Canada.
Cumulative costs to date are approximately US $384,000. At current product prices, payout of the six-well program is estimated to occur within 18 months. The program has also created the opportunity to drill a number of low-risk development wells. Following extended testing, an independent consulting engineer will be retained to estimate reserves and net present value.
At Highvale in north central Alberta, CGX participated in drilling a horizontal well to a vertical depth of 1620 metres and total depth of 1950 metres, encountering a dolomite reservoir in the horizontal section. The reservoir was identified on seismic and from data from an abandoned vertical well on the lease that had produced 10,000 barrels of 35° API oil from 3 metres of dolomite pay. In early October, the horizontal well will be tied into production facilities and a pipeline that are a half mile from the location. By drilling the well, CGX earned a 30% interest in 320 acres of land, convertible to a 15% interest at payout. There is the possibility of drilling a second horizontal well on the lease. The land is held under a Petroleum and Natural Gas Lease, restricted to rights in the Banff formation
At Halkirk in central Alberta, CGX participated in drilling three gas wells to depths of approximately 1100 metres, encountering multiple zones of gas potential. Nearby production is from the Glauconite, Sparky and Viking formations. Testing will begin in early October, followed by pipeline tie-in to facilities that are within two miles of each location. By drilling the wells, CGX has earned a 30% interest in 1920 gross acres, convertible to a 15% interest at payout. The land is held under a combination of Petroleum and Natural Gas Leases, plus Freehold Leases.
At Vermillion in eastern Alberta, CGX participated in drilling two wells to depths of approximately 600 metres, encountering multiple zones of heavy oil potential plus one gas zone that the company intends to place on production immediately. A production test of the Rex reservoir in the first well confirms that the zone can be developed into commercial production. The GP was tested for gas production in the same well which will be placed on stream in October at approximately 500 mcf/d. Additional heavy oil potential exists in the GP and Sparky sandstone formations based on logs samples and geological mapping. Common surface facilities are planned to be developed for producing all zones. The second location was successfully completed in the Sparky at 60 bopd and will be placed on production in October. By drilling the wells, CGX earned a 15% interest in 1,280 gross acres, convertible to a 7.5% interest at payout. Following drilling, CGX acquired a 7.5% interest in an adjoining 1,280 acres at a Crown land sale to control the Rex pool for future development. For heavy oil, the spacing units for production could be reduced to 40 acres or smaller, creating the potential to drill up to 16 or more wells on each of the four sections. Production facilities and pipelines exist within two miles. The lands are held under a combination of Freehold and a Heavy Oil Leases.
In Guyana news, CGX is encouraged by recent developments as reported in the Guyanese press in Georgetown. On October 4th, 2001, Dr. Rudy Insanally, Foreign Minister of Guyana commented on the near term accreditation of the new Surinamese Ambassador to Guyana. Dr. Insanally further announced that President Bharrat Jagdeo has received an invitation from President Venetiaan of Suriname to visit the neighbouring country at a mutually convenient time. Dr. Insanally said the two Governments are now working at the diplomatic level to see when that meeting could take place. CGX remains committed to its ongoing exploration program in the Guyana – Suriname Basin.
CGX Energy Inc. (CDNX – OYL.U) is a Canadian-based oil and gas exploration company focused on the exploration for oil in the Guyana basin, low risk development in Western Canada and is actively looking at other international opportunities. 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 over 5,000 shareholders worldwide. For further information please contact: Kerry Sully, President & CEO, at (604) 733-9647, Dan Farrell or Denis Clement at (416) 364-5569 or visit our website at www.cgxenergy.com .
THIS PRESS RELEASE WAS PREPARED BY CGX ENERGY INC., WHICH ACCEPTS THE RESPONSIBILITY AS TO ITS ACCURACY. NO REGULATORY AUTHORITY OR SIMILAR BODY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.
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