(TSX-V | OYL)
TORONTO, May 2, 2016 /CNW/ - CGX Energy Inc. (TSX-V
- OYL) ("CGX Energy" or the "Company") announced
today the release of its audited consolidated financial results for
the year ended December 31, 2015,
together with its Management Discussion and Analysis. These
documents will be posted on the Company's website at
www.cgxenergy.com and SEDAR at www.sedar.com.
Dewi Jones, Chief Executive
Officer of CGX Energy, commented: "In 2015, the Company's business
plan was significantly impacted by the prevalence of low
international oil prices and a global downswing in exploration
budgets. Despite these difficulties the Company was successful in
its ability to dramatically cut costs, deal with its significant
payables and move towards monetizing some of its non-core assets.
We continue to be very optimistic about exploration and development
drilling in Guyana and look
forward to a stronger 2016."
2015 Year-End Overview and Highlights
- On November 16, 2015, Company
issued a convertible debenture (the "Convertible Debenture")
by way of private placement in the amount of $1.5 million (the "Principal Amount") to
Pacific Exploration & Production Corp. ("Pacific"). The
Convertible Debenture has a term of twelve months and an annual
interest payable of 5% and will be convertible at the option of the
holder at a conversion price of $0.335. The Principal Amount has been funded in
full. In the event that the Company fails to satisfy any of its
obligations under the Convertible Debenture, Pacific shall have the
right to take a pledge of shares in the Company's subsidiaries.
- As a result of the continuing decline in oil prices in 2015,
the Company obtained a deferral of its commitment well in the
Corentyne Block. Currently, the spud date for this well is
July 1, 2016.
- On March 4, 2016, CGX entered
into a bridge loan facility with Pacific in an amount up to
U.S.$2 million. This facility shall
be used to help CGX fund monthly general and administrative
expenses and is a drawdown facility that is approved by Pacific on
a monthly basis. Pacific has the right to take a pledge of
shares of CGX's subsidiaries in an event of default under the
facility. As of April 29, 2016,
the Company has drawn U.S.$586,000 on
the facility.
- On February 10, 2016, the Company
announced the resignation of John
Cullen as a director.
- On April 18, 2016, CGX entered
into a term sheet with a potential partner (the "Partner")
in respect of CGX's wharf and logistics yard located in Berbice,
Guyana (the "Term Sheet").
The Term Sheet contemplates an initial payment upon signing of the
Term Sheet and subsequent payments based upon agreed
milestones. The Term Sheet also provides the Partner with a
seventy-five day exclusivity period within which to conduct further
due diligence and to allow the parties to negotiate definitive
documentation.
- On June 19, 2014, CGX Resources,
a wholly-owned subsidiary of the Company, entered in to: (i) a
drilling rig agreement (the "Drilling Agreement") with Japan
Drilling Co., Ltd. ("JDC"); and (ii) a rig sharing agreement
(the "Rig Sharing Agreement") with JDC, Teikoku Oil
(Suriname) Co., Ltd ("INPEX") for the use of JDC's
HAKURYU-12 drilling rig (the "Rig"). Upon termination of the
Drilling Agreement, the total amount payable to JDC by CGX
Resources was U.S.$20.35
million (the "JDC Payable"). Pursuant to the terms of a
definitive agreement entered into with JDC effective November 30, 2015 (the "JDC Settlement
Agreement"), the JDC Payable will be paid as follows: (i)
U.S.$5.5 million payable in Common
Shares; (ii) U.S.$500,000 on or
before December 1, 2015; (iii)
approximately U.S.$7.18 million on or
before March 25, 2016; and (iv)
approximately U.S.$7.18 million on or
before June 15, 2016. The total
amount of the JDC Payable is subject to adjustment based upon the
demobilization fees under the Drilling Agreement. JDC will be
issued 16,522,500 Common Shares (the "JDC Settlement
Shares") at a price of C$0.44 per
share resulting in JDC owning approximately 15% of the Company on a
non-diluted basis. The JDC Settlement Agreement also provides
for a parent guarantee from CGX Energy to JDC in respect of the JDC
Payable. As a result of the much lower prices for rigs currently
available, the Company is of the view that notwithstanding the JDC
Payable, drilling the next exploration well offshore Guyana on the Corentyne Block will ultimately
cost approximately the same as under the Drilling Agreement.
The Company is in continuous negotiations with INPEX and JDC with a
view to determining how to address these significant payables in
light of depressed oil prices.
- CGX continues its initiatives to secure a joint venture partner
for all 3 Petroleum Prospecting Licences ("PPL") and is
actively pursuing this initiative. In the short term, the
Company will require additional financing and seek to widen its
shareholder base, but still with a view to negotiating farm-out
transactions as the primary way to enhance shareholder
value. The Company is pleased about ExxonMobil's
announcement of a significant oil discovery of more than 295 feet
of high-quality oil-bearing sandstone reservoirs on the Stabroek
Block located approximately 120 miles offshore Guyana.
About CGX Energy
CGX Energy is a Canadian-based oil and gas exploration company
focused on the exploration of oil in the Guyana-Suriname Basin.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE
Forward-Looking Statements:
This news release contains forward-looking statements.
Forward-looking statements are frequently characterized by words
such as "plan", "expect", "project", "intend", "believe",
anticipate", "estimate", "may", "will", "would", "potential",
"proposed" and other similar words, or statements that certain
events or conditions "may" or "will" occur in the future. These
forward-looking statements are based on certain key expectations
and assumptions made by CGX Energy. CGX Energy believes the
expectations and assumptions on which it develops forward-looking
statements are reasonable; however, undue reliance should not be
placed on forward-looking statements as there can be no assurance
they will prove to be correct. Since forward-looking statements
address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results could
differ materially from those currently anticipated due to a number
of factors and risks. In addition, other risks that may affect the
forward-looking statements in this news release are outlined
further in the Company's Annual Information Form dated April 29, 2015 filed on SEDAR at
www.sedar.com.
The forward-looking statements contained in this news release
are made as of the date hereof and CGX Energy undertakes no
obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
SOURCE CGX Energy Inc.