Canadian oil and gas company CGX Energy will continue with the demobilisation of exploration drilling offshore Guyana, according to the Guyanese Maritime Administration Department.
In its notice to mariners on Friday, the department confirmed CGX Energy’s demobilisation of exploration drilling was underway within the CGX-operated Corentyne block – where the Kawa-1 well is located – in Guyana’s Exclusive Economic Zone.
Frontera Energy is the majority shareholder and joint venture partner of CGX in the Petroleum Prospecting Licenses for the Corentyne and Demerara blocks.
To remind, the Kawa-1 well was spud in August 2021, using the Maersk Discoverer rig, with expectations to reach total depth in the first half of December 2021.
However, the two companies informed a few days ago that these plans had changed and the drilling operations would last longer than expected, increasing the overall cost of the well .
Based on this update, the current cost estimate of the Kawa-1 well is now forecast to be approximately $115-$125 million, while the previous estimate was $90 million. Due to this, CGX may be required to seek additional financing in keeping with the ongoing drilling program and is currently assessing several strategic opportunities.
The Kawa-1 well is located in the northeast quadrant of the Corentyne block approximately 200 kilometres offshore from Georgetown. The water depth is approximately 355 meters and the expected total depth of the well is 6,575 meters.
The Maritime Administration Department confirmed in its latest statement that the Maersk Discoverer rig would be engaged in demobilisation activities, scheduled to be concluded on 31 December 2022.
The notice further explains that the demobilisation area is situated approximately 90 nautical miles (167 kilometres) from the Coast of Guyana, and covers an area of 4.7 square nautical miles (16.25 square kilometres).
The Maersk Discoverer rig is a sixth-generation semi-submersible drilling rig and the drilling contract for exploration drilling in the Corentyne block was awarded back in April 2021.