CGX Energy & Frontera Energy Provide Operational Update on Kawa-1 Well

Source: 12/16/2021, Location: South America

CGX Energy Inc. (OYL) ("CGX") and Frontera Energy Corporation (FEC) ("Frontera"), the majority shareholder of and joint venture partner of CGX in the Petroleum Prospecting Licenses for the Corentyne and Demerara blocks offshore Guyana (the "Joint Venture"), provide an operational update on the Kawa-1 exploration well in the Corentyne Block, offshore Guyana.

To date, approximately 90% of the planned footage has been drilled and the initial results suggest an active hydrocarbon system is present at the Kawa-1 location. Horizon 19, the first of three geological zones targeted by the Joint Venture, has been penetrated. Logging-While-Drilling and cuttings indicate the presence of hydrocarbons in several Campanian and upper Santonian formations. The Joint Venture will run the planned 9 5/8" liner at current depth, then drill ahead to the main Santonian target zone (Horizon 23) and the deeper secondary Santonian target zone (Horizon 25). The initial geological results will be further evaluated by wireline logging at the end of the well as part of the logging program for the deeper zones.

The Joint Venture is pleased to report that drilling operations have recorded only a single lost time injury since August and Covid-19 protocols have resulted in no disruptions to operations and no positive cases detected after arrival on the drilling unit.

Drilling has taken longer than originally forecast and costs are projected to increase. The current cost estimate of the Kawa-1 well is now forecast to be approximately $115-$125 million. The Joint Venture will provide an update on costs and will issue full exploration results of the Kawa-1 well once total depth has been reached and results have been analyzed.

CGX may be required to seek additional financing in keeping with the ongoing drilling program and is currently assessing several strategic opportunities.

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