CGX Energy Inc. ("CGX") and Frontera Energy Corporation (Frontera) announced that they have further amended a letter agreement previously disclosed in a news release of CGX and Frontera on December 4, 2018 and amended on December 14, 2018, to extend the time of the launch of the equity financing in the amount of approximately US$20 million to occur on or prior to February 6, 2019 and anticipated to be completed on or prior to March 15, 2019, subject to regulatory approval.
Further, CGX and Frontera have amended the letter agreement to extend the time by which CGX Resources Inc., a wholly owned subsidiary of CGX, and Frontera will enter into a farm-in joint venture agreement covering CGX's two shallow water offshore Petroleum Prospecting Licenses in Guyana, the Corentyne and Demerara Blocks as previously disclosed on December 4, 2018, to on or prior to February 6, 2019.
These changes to the timing are not expected to have any impact on the timing of the drilling of the Utakwaaka-1 exploration well on the Corentyne Block which is required to be drilled by November 27, 2019. As previously announced by CGX Energy, a definitive rig agreement has been executed with ROWAN RIGS S.A R.L for the use of the Ralph Coffman offshore jack-up rig which is targeted to commence during the second quarter of 2019.
Related Party Transaction
The proposed transactions between Frontera and CGX contemplated by the letter agreement are related party transactions under Multilateral Instrument 61-101. For further details, please see the news releases of CGX and Frontera dated December 4, 2018 and December 17, 2018 and the material change reports of CGX dated December 10, 2018 and December 17, 2018.