CGX Energy Begins To Recover Today, Up 11% Mid-Morning


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After a brutal day yesterday, when CGX Energy (OYL.V) dipped to levels not seen since Sept 2003, the shares are up 11.11% mid-morning, to 35 cents, after briefly touching a high of 36 cents.

More than 2.2 million shares have changed hands.

CGX Energy announced yesterday the results of the drilling of the Eagle-1 well on the Company's 100% owned and operated Corentyne Petroleum Prospecting License ( PPL ), offshore Guyana. The Eagle-1 well reached total depth of 4,328 metres on April 25th. During drilling, the Eagle-1 well encountered oil and gas shows through the objective Eocene and Maastrichtian geologic zones and at the, yet to be confirmed, Oligocene zone indicating an active petroleum system where generated hydrocarbons have migrated through the pre-Miocene section drilled by the well. Additional open hole logs were necessary to determine the nature of the fluids in those zones. Hence, CMR (combinable magnetic resonance) and MDT (modular formation dynamics) were run and both logs identified the presence of good quality sandstone reservoirs that unfortunately proved to be water bearing.

The Eagle-1 well was initially budgeted for 60 days of drilling but experienced weather delays and mechanical issues which extended operations for approximately an additional 30 days. The initial cost estimate for the Eagle-1 well was $55 million, however with the delays the Eagle-1 well is now estimated to cost $71 million. As a result, the Company will need to raise approximately $20 million in the near term.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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