GUYANA

Orinduik Block

Eco (Atlantic) Oil & Gas, the oil and gas exploration company with licences in highly prospective regions in Guyana and Namibia, announced its drilling plans for 2019 on the Orinduik Block, offshore Guyana.

Highlights:

• Initial 2019 drill plan approved by Eco Atlantic, Total E&P Activities Petrolieres and Tullow Guyana (Operator)
• First exploration well on Orinduik to be drilled late May – early June 2019, on the Jethro-Lobe prospect
• The prospect is an Upper Tertiary stratigraphically trapped canyon turbidite
• The targeted prospect is estimated by the Company to hold 250mmbbl of gross prospective resources and the Chance Of Success is estimated to be 44%.
• Net cost of first well estimated at USD$7.6m
• Partners finalising synergies of at least two wells for 2019 drilling
• The Partners Eco Atlantic, Total and Tullow (Operator) approved the initial 2019 work plan and budget for the first exploration well on Orinduik Block on 30 November 2018. The initial budget is for drilling the ‘Jethro-Lobe’ prospect by end of May – early June 2019.
• This will be the first of at least two well campaigns proposed by the Operator in 2019.

The Partners approved the purchase of the necessary long lead items and are considering proposals of drilling and service contractors who offered a firm drilling window within the envisaged timeframe and competitive rates. Eco estimates that the approximate net cost of the first well, targeting the Jethro Lobe prospect, at up to USD $7.6 million. Eco is fully funded for the 2019 campaign having current cash of over USD $20 million, as announced on 29 November 2018.

The Jethro-Lobe prospect, which will be drilled from a conventional drill ship, is an Upper Tertiary stratigraphically trapped canyon turbidite in 1,350 meters of water. The targeted prospect is estimated by the Company to hold 250mmbbl of gross prospective resources and the Chance Of Success is estimated to be 44%.

Colin Kinley, Chief Operating Officer of Eco Atlantic commented:

‘The Jethro-Lobe well is the first well approved by the Partners for 2019. As announced by Tullow, there are a number of high-potential additional drilling candidates that are on the top of the interpretation list. The Partners are currently evaluating the synergies of drilling a second well in this campaign and are assessing rig timing and budget to drill a second candidate. We have a great deal of confidence in the selection of the Jethro-Lobe drill candidate; the Partners are unanimous on the selection of the location, reservoir quality, charge and production characteristics and view this candidate as having a high chance of success and potential for a first discovery.

‘Our confidence was bolstered even further by the upgraded estimate of the discovered recoverable resource to over 5 billion barrels of oil equivalent on the Stabroek Block, as announced by ExxonMobil and Hess on 3 December 2018. Further evaluation of previous discoveries in addition to the tenth discovery on the block, Pluma-1, contributed to the upgrade. Each successful well drilled on Stabroek lowers Eco’s risk on Orinduik.’

Source: Eco (Atlantic)

Hess

Hess Corporation announced a 2019 E&P capital and exploratory budget of $2.9 billion. 75% will be allocated to high return growth assets in the Bakken and Guyana. Net production is forecast to average between 270,000 boepd and 280,000 boepd in 2019, excluding Libya, compared to 245,000 boepd in 2018 proforma for the sale of the company’s joint venture interests in the Utica shale play. Bakken net production is forecast to average between 135,000 boepd and 145,000 boepd in 2019.

“Our capital and exploratory expenditure program is designed to deliver strong returns, production growth and significant future free cash flow,” CEO John Hess said. “As we focus spending on our high return investment opportunities, we will continue to reduce our unit costs to drive margin expansion and improve profitability.” Greg Hill, COO, said “In Guyana, 2019 will be the peak spend year for the Liza phase 1 development, which is on track for first oil by early 2020. We also will begin Liza phase 2 development spending, complete the plan of development for Payara, and advance front end engineering and design work for future development phases.”

Hess will review its long term capital program at its Investor Day in Houston on December 12.  The $2.9 billion budget is allocated as follows: $1,890 million (65%) for production, $570 million (20%) for offshore developments and $440 million (15%) for exploration and appraisal activities.

Developments

• $260 million associated with the Liza Phase 1 development offshore Guyana (Hess 30%), where first production is expected by 2020.
• $310 million includes spend for Liza Phase 2 development, completing the plan of development for Payara, and front end engineering and design work for future development phases.

Exploration and appraisal

$440 million to drill exploration and appraisal wells on the Stabroek Block offshore Guyana (Hess 30%). Funds are also included for seismic acquisition and processing in Guyana, Suriname and the deepwater Gulf of Mexico, and for license acquisitions.

ExxonMobil

Statement regarding Guyana drilling and development activities

26 December
ExxonMobil said that drilling and development operations offshore Guyana are unaffected by an incident involving seismic acquisition vessels.
Two vessels operated by Petroleum Geo-Services ceased conducting 3-D seismic data acquisition in the northwest portion of the Stabroek Block offshore Guyana when approached by the Venezuela navy. The area where the incident occurred is more than 110 kilometers from the Ranger discovery, the closest of 10 oil discoveries made by ExxonMobil in the southeast section of the Stabroek Block.

Exploration and development drilling is continuing in the southeast area of the Stabroek Block. Activities related to the LizaPhase 1 development, which is expected to begin producing up to 120,000 barrels of oil per day in early 2020, are also unaffected.

ExxonMobil operates the Stabroek Block offshore Guyana under license from the government of Guyana. The acquisition of seismic data was being conducted under license from the government of Guyana in the country’s exclusive economic zone.

ExxonMobil estimates there is potential for at least five floating, production storage and offloading vessels (FPSO) on the Stabroek Block producing more than 750,000 barrels of oil per day by 2025.

Liza Phase 2 is expected to start production by mid-2022. Pending government and regulatory approvals, project sanction is expected in the first quarter of 2019 and will use a second FPSO designed to produce up to 220,000 barrels per day. Sanctioningof a third development, Payara, is also expected in 2019 with start up as early as 2023.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

Exxon drilling two new wells.

ExxonMobil is gearing up to begin drilling for oil at two locations offshore. weeks after its 10th major strike.

These plans have not been affected by the interruption of the gathering of seismic data in the western part of the Liza-1 block following an incursion into Guyana’s waters by the Venezuelan Navy.

Local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) will begin a three-month drilling operation on January 5th, 2019 at the Tilapia-1 well site within the Stabroek Block. Tilapia-1 is located 3.4 miles (5.5 kilometers) west of the Longtail-1 well. Eleven vessels are in this operation: Noble Tom Madden, M/V Cat Island, M/V Eland, M/V Oryx, Clarence Triche, Liam J Mc Call, Paradise Island, Sanibel Island, Horn Island, Robert Adams and Jack Edwards.

The drill site is approximately 111.4 nautical miles from the coast and covers an area of one square kilometer.

On January 2nd, 2019, EEPGL will begin a three-month operation at the Haimara-1 well site. The Stena Carron drillship will also be supported by the same vessels being used for the Tilapia-1 well.

On December 3rd, ExxonMobil announced its 10th discovery offshore Guyana at Pluma-1.since May 2015. It increased its estimate of the discovered recoverable resource for Stabroek Block to over 5 billion oil-equivalent barrels.

“The discovery of a resource base of more than 5 billion oil-equivalent barrels in less than four years is a testament of our technical expertise and rigorous evaluation and pursuit of high-potential, high-risk opportunities in this frontier area,” said Neil Chapman, ExxonMobil senior vice president. “We will continue to apply what we’ve learned to identify additional exploration prospects and potential future discoveries that will deliver significant value to Guyanese people, our partners and shareholders.”

Pluma-1 well encountered approximately 121 feet (37 meters) of high-quality hydrocarbon-bearing sandstone reservoir. The Noble Tom Madden drillship began drilling on Nov. 1. The well is located approximately 17 miles (27 kilometers) south of the Turbot-1 well.

“Together with the government and people of Guyana, we are continuing to grow the value of the Stabroek Block for Guyana, our partners and ExxonMobil with successful exploration investments,” Steve Greenlee, president of ExxonMobil Exploration Company had said.

The Liza Phase 1 development is expected to begin producing up to 120,000 barrels oil per day by early 2020, utilizing the Liza Destiny floating storage, production and offloading vessel.

ExxonMobil Liza Phase One

With a Master’s Degree in Oil and Gas Management Attorney, Charles Ramson is keeping up to date with the pace of development for Liza Phase one as operator ExxonMobil is moving ahead of schedule in its preparation. ““The project development is going well and is currently running ahead of schedule. … government continues to pussyfoot. This reality tells Guyanese all they need to know about their future under the rule of the APNU+AFC over an oil producing country.”

The Floating Production Storage and Offloading unit (FPSO) may be completed in Singapore by the middle of 2019 and reach Guyana in six weeks. Once in place and functioning, it is smooth sailing onwards and oil production can commence in the last quarter of 2019 instead of March 2020 as originally targeted. It is all well and good that ExxonMobil is “on the ball”. No one can blame the company for that; I mean it is not called an oil giant for nothing. Oil is beyond politics; it will determine our future and the government ought to have been far more prepared knowing the possibilities of first oil being next year. No minister spoke extensively about oil and gas during the National Budget Debate.

The Ministry of the Presidency is responsible for oil and gas and has control of the Department of Energy. The Minister of State did not discuss petroleum production preparation during the Budget Debate.
Government allocated $400M for 2019 for the Energy Department. “The department was given $400M for both capital and current expenditure. That is US$2M. The Liza phase one project is US$4.4B. How are we to adequately prepare …, given all that is needed …, with that paltry sum?
The real truth is that we cannot…. oil is big, too big for the management to be a department within a Ministry. We need an oil ministry. This is serious money and those inflows are going to be happening sooner than we expected.” Guyana is not going to be ready for first oil. The Environmental Protection Agency (EPA) is still to be strengthened. Reforms to the public financial management system are yet to be completed. There remains limited capacity at all levels in the Ministry of Finance “and ..even the IMF (International Monetary Fund) pointed it out and we are still to improve our Public Financial Management systems.” There is nothing that Guyana accomplished in preparation for first oil. There is no

• -Local Content Legislation or policy.
• – Petroleum Commission to regulate the Oil and Gas sector ;
• – Sovereign Wealth Fund or relevant committees
• – fully functioning cost-auditing department,
• – Environmental Department to deal with oil spill readiness,
• – Petroleum Geology Department to assess seismic and appraisal information
• – Pertinent Petroleum Laws
• – National Oil Company.

Outgoing US Ambassador, Perry Holloway said that Guyana got a “good deal” with ExxonMobil. Guyana gets 50 percent of the profit oil. The government disclaims contentions by the Opposition that the benefits from oil will not flow until 2025, trying to create false expectations. Exxon indicated that in the early years, Guyana is likely to earn US$300M per annum and as production increases this sum is likely to grow.

Gas to power.

Over 200 people will gain employment as a result of the gas to power project. Electricity cost will fall to US 10 cents per megawatt/hour. The government does not know where the 200 mv plant will be located. A final decision is delayed, stalling completion of a feasibility study that ExxonMobil is conducting to determine the economic viability of the project, a temporary fix for electricity woes.

The Production Sharing Agreement between Guyana and ExxonMobil gives the company the right to re-inject associated gas into oil producing wells. It provides for alternative arrangements like the gas to power projeci, predicated on a feasibility study by ExxonMobil. The Department of Energy said a gas to power feasibility analysis is being conducted. ExxonMobil “has done all it could. The company has done its part. but the feasibility study is stalled because the government cannot provide the needed facts.”

ExxonMobil and Government know that the project is viable and electricity can be generated. The important economic analysis that forms part of the feasibility study, is still to be completed.
For ExxonMobil to determine the economic feasibility of the project, government will have to make decisions upon demand of the company. “When the company is armed with these decisions, only then will it be able to complete its assessment. .. you cannot expect ExxonMobil to be able to pronounce on whether the project is economically feasible if it does not even know where the plant would be located. That is a decision that the government has to make and cannot make to this date. How are we to be considered a serious country if simple things like these cannot be given priority?”

Only associated gas has been discovered in Guyana. Country Manager, Rod Henson, thinks it best that Guyana re-injects its natural gas, a more economical route to take but ExxonMobil is considering Guyana’s special circumstance and the need to reduce the cost of electricity. These comments were made during a parliamentary meeting of the Committee of Natural Resources. “Considering all that Henson has said, we need to decide soon whether we want to go down the road of gas to power. But the main thing is that we need to decide. If we rule out gas to power then we have to get .. another solution to our electricity woes but this stall is not helpful; in fact it is destructive.”

On comments that the plant will be stationed at Woodlands, Mahaica, East Coast Demerara “What has since happened? The public is not aware. But… the government is still to be sure about this location. Otherwise, ExxonMobil would have been much closer to completing its economic analysis.” This will vary based on the location for the plant to be stationed because that will then translate to how much pipe will be laid. Location will indicate how much stabilization work will have to be done on the shoreline and where the generators will be placed.

Low development cost for Guyana oil wells – operators see busy year ahead

Hess said that operations at the Payara prospect in the Stabroek Block are expected to be sanctioned along with the Liza Phase 2 operations in 2019. The Payara operation, , could see Guyana pumping 500,000 barrels of oil by 2023.

World Oil and Gas Council

Guyana leads the way in petroleum discoveries.
World Oil & Gas Council voted Exxon Mobil the 2018 Large Cap Company and Explorer of the Year. Five discoveries were announced in Guyana in 2018 and 10 discoveries since 2015.

20 Dec 2018

• Recognizes ExxonMobil’s industry-leading portfolio and investments
• Achievements in the year contributing to aggressive growth plans
• ExxonMobil portfolio best in two decades, strengthened through acquisitions and other activities
• ExxonMobil was named 2018 Large Cap Company of the Yearand Explorer of the Year by the World Oil and Gas Council in recognition of excellence and innovation in the global energy industry.

Brad Corson, president of ExxonMobil Upstream Ventures, accepted the award for Large Cap Company of the Year. Corson said, ‘We are honored to be recognized as an industry leader and are confident that the growth strategy we are currently implementing will drive long-term shareholder value and industry-leading returns. This award is a reflection of the dedication of our employees and their daily commitment to excellence.’

During the year, ExxonMobil announced a number of discoveries, acquisitions and other activities around the world. The company’s industry-leading portfolio underpins aggressive growth plans. These opportunities span all of the corporation’s business lines and represent the most attractive investment portfolio since the Exxon and Mobil merger.

ExxonMobil was also the recipient of the Explorer of the Year award for the second year in a row.

‘We appreciate the Council’s recognition of our efforts to add the highest quality resources to our development portfolio as well as continuing to build on our leading acreage position,’ said Steve Greenlee, president of ExxonMobil Exploration Company. ‘Particularly encouraging this year was our drilling success in Guyana as well as capture of a large number of quality drilling opportunities in Brazil.’

Important activities during the year include:

Upstream

Building on acquisition of companies owned by the Bass family of Fort Worth, the company has significantly accelerated operations and now has 42 rigs operating in the Permian Basin, more than any other in the industry and has announced plans to triple production by 2025. Even with this rapid expansion, the company announced targets to reduce flaring and methane emissions.
Only months after ExxonMobil’s entry into Mozambique’s offshore Area 4 block, Mozambique Rovuma Venture submitted the development plan for the first phase of the Rovuma LNG project, which will produce, liquefy and market natural gas from the Mamba fields.
The company completed the purchase of interest in the BM-S-8 block offshore Brazil, which contains part of the more than 2-billion-barrel, pre-salt Carcara oil field. ExxonMobil expanded its deepwater portfolio in the country to approximately 2.3 million net acres.
Five discoveries were announced in Guyana in 2018 – Ranger-1, Pacora-1, Longtail-1, Hammerhead-1 and Pluma-1 – where the company has discovered over 5 billion oil-equivalent barrels of recoverable resource through 10 discoveries since 2015.

Downstream

In October, the company started operations of a new unit at its Antwerp refinery in Belgium to convert heavy, higher-sulfur residual oils into high-value transportation fuels.
ExxonMobil announced the startup of a new unit at its Beaumont, Texas, refinery to increase production of ultra-low sulfur fuels.
ExxonMobil opened the first Mobil-branded service stations in Mexico, and acquired one of Indonesia’s largest manufacturers and marketers of motorcycle lubricants.

Chemical

ExxonMobil started operations at its new ethane cracker in Baytown, Texas as well as at its integrated manufacturing complex in Singapore where it produces butyl and resins.
The company officially formed its Gulf Coast Growth Ventures JV with SABIC and commenced work on the project for a 1.8-million-ton ethane cracker currently planned for construction in San Patricio County, Texas.

Source: ExxonMobil

Exxon Mobil is the operator in Guyana and holds a 45% interest in the Stabroek Block. Hess has a 30% interest and CNOOC Nexen Petroleum Guyana Limited holds 25% interest.

When Exxon made its 10th discovery earlier this month, the company said:

Liza Phase 1 development is expected to begin producing up to 120,000 barrels oil per day by early 2020, utilizing the Liza Destiny floating storage, production and offloading vessel (FPSO). Liza Phase 2 is expected to start up by mid 2022. Pending government and regulatory approvals, Liza Phase 2 project sanction is expected in early 2019 and will use a second FPSO designed to produce up to 220,000 barrels per day. Sanctioning of a third development, Payara, is expected in 2019.

Because of the world-class nature of these discoveries, Exxon and its partners decided to accelerate development. The estimated production ramp-up now looks like this:

Source: Exxon Corporate Presentation

As energy exploration rose for the first time in three years,in 2018 Guyana led the way for new oil and gas discoveries followed by Russia and the United States .

The booming West Texas Permian Basin drove new oil and gas production and growth will continue into 2019 and beyond. “Permian mega-deals defined 2018, and we expect more in 2019,” said Wood Mackenzie’s upstream research director. “After spending nearly $35 billion on (shale) acquisitions in 2018, the super majors and bigger independents are serious about ensuring long-term success.”

Big Oil companies are adding acreage and scale and leading the way in adopting a factory model for oil production, that depends on scale, efficiency and automation to produce high volumes of crude at lower costs. “Big will be beautiful in the new Permian landscape,” he said.

The future of the industry still depends on big discoveries and those are mainly offshore. The last oil bust forced companies to prune exploration spending between 2015 and 2017. Offshore discoveries accounted for over 80 percent of the newly found resources this year. Exxon Mobil’s partnership with Hess Corp. in Guyana led the way, said Palzor Shenga of Rystad. Guyana accounted for almost a quarter of the 8.8 billion barrels in oil equivalent discovered so far this year.

“Global exploration activity and discoveries have halted their year-after-year decline and look set to rise in the next year. This as an exciting recovery which runs contrary to a decline in global exploration spending from 2014 to 2017.”

Exxon Mobil could push Guyana past Mexico, Venezuela in oil output

Exxon and Hess announced over 2 billion barrels in new discoveries offshore Guyana this year, increasing their overall recoverable resources in the region to about 5 billion barrels of oil equivalent. Outside the Permian, Exxon Mobil’s biggest investments are in Guyana with commercial production expected early next decade.

Russian company Novatek discovered nearly 1 billion barrels in shallow water of Ob Bay in northern Russia. Chevron and Royal Dutch Shell found a combined 750 million barrels of oil equivalent in the U.S. Gulf of Mexico. Chevron and Total announced the Ballymore prospect 75 miles offshore Louisiana coast in the Gulf. Shell revealed the Dover discovery 13 miles from its new Appomattox platform launched into the Gulf this year.

New discoveries in the deepwater Gulf had slowed with energy companies focused on onshore shale. Companies are cutting costs and investing in new drilling and production near existing platforms where they can connect to existing pipelines and storage without needing new facilities.

New growth includes natural gas fields in Qatar, offshore oil in Brazil and discoveries in Cyprus, South Africa, Australia and Norway.

CGX Energy and Frontera Announce Strategic Joint Venture Agreement.

Represents Critical First Step in Recapitalization of CGX and the Advancement of its Exploration Projects in Guyana

CGX Energy Inc. and Frontera Energy Corporation announced that they have entered into a letter agreement to enable CGX to finance drilling costs of two shallow water offshore blocks , currently 100% owned and operated by a subsidiary of CGX. The agreement provides financial support as a critical step in a series of transactions that CGX is seeking to undertake to restructure its liabilities and provide working capital to advance its offshore exploration projects.

Frontera and a wholly owned subsidiary of CGX, CGX Resources Inc., will enter into a farm-in joint venture agreement (the “JV Agreement”) covering CGX’s two shallow water offshore Petroleum Prospecting Licenses, the Corentyne and Demerara Blocks. Final approval for the farm-in is required from the Government of Guyana. Upon completion of the agreement and receipt of regulatory approval for the farm-in, Frontera will acquire a 33.33% working interest in the two blocks in exchange for a US$33.3 million signing bonus. Frontera agreed to pay one-third of the applicable costs plus an additional 8.333% of CGX’s direct drilling costs for the initial exploratory commitment wells in the two blocks. CGX would be the operator with assistance from Frontera.

Professor Suresh Narine, Executive Chairman and Executive Director (Guyana), CGX, said: “With the Frontera joint venture, CGX will be positioned to accelerate development of the Corentyne and Demerara Blocks, CGX’s two largest offshore concessions. We plan to raise additional capital on a basis that will allow shareholders to participate. Our shareholders, who have supported CGX through its difficult times, will thereby be able to benefit from the exciting opportunities ahead for the company. I’m very optimistic about the future of CGX, our relationship as a commercial partner to Guyana and the value that can be created for our shareholders and stakeholders. CGX is widely held as Guyana’s only Indigenous Oil and Gas Exploration company and we remain firmly committed to Guyana and the Guyanese cultural and social fabric. I would like to thank the Government and people of Guyana for their confidence in CGX over the past few years, and I also want to thank the CGX and Frontera teams for all their hard work getting us this far.”

Gabriel de Alba, Chairman of the Board of Directors of Frontera, added: “We are very excited to work with CGX through this new strategic joint venture in Guyana. Together, we will be well positioned to advance the exploration and development of the most exciting offshore basin in the world. Combining CGX’s long history and deep roots in the country with Frontera’s technical depth and financial strength creates great opportunities for success for the benefit of CGX, Frontera and the people of Guyana. This joint venture forms an important part of Frontera’s plans to build growth for the future.”

Richard Herbert, Chief Executive Officer of Frontera, commented: “Offshore Guyana has emerged during the last few years as one of the most exciting exploration areas in the world. CGX’s offshore exploration blocks have been significantly derisked by exploration activity in the basin to date and contain multiple play types which offer significant opportunity. Once executed, our farm-in agreement with CGX will give the Company a direct interest in the significant exploration potential of both the Corentyne and Demarara Blocks. We look forward to building on our relationship with CGX and the people of Guyana as Frontera expands its medium- and long-term opportunity set in the north Andean region of South America and the Caribbean.”

Frontera and CGX also agreed to arrangements to provide additional financial support for CGX. Upon the closing of the JV Agreement, CGX will repay Frontera approximately U.S.$17 million of debt which is currently in default and owing to Frontera. This debt will be extended to March 31, 2019 and is expected to be repaid earlier by way of an offset against the U.S.$33.3 million signing bonus payable to CGX referred to above. Frontera will extend its April 25, 2018 bridge loan through September 30, 2019 (which loan is currently in default with principal outstanding of U.S.$8,861,339 plus interest), and will seek regulatory approval to amend the terms to provide Frontera the ability to have the outstanding principal amount of the loan repaid in CGX common shares, at a conversion price of the U.S. Dollar equivalent of CDN$0.29 per share, at any point on or before maturity of the loan. This option will allow CGX to enhance its liquidity. Frontera will also agree to guarantee an equity financing of CGX of up to U.S.$20 million, the terms of which CGX expects to announce within the next two weeks. No proceeds from the financing will be payable to Frontera. This financing will enable CGX to settle its U.S.$7,904,037 of liabilities with Japan Drilling Co., Ltd. as disclosed by CGX in its October 31, 2018 press release. The cumulative effect of the transactions if successfully completed would satisfy approximately U.S.$34.5 million of CGX’s existing indebtedness and provide CGX with approximately U.S.$27.5 million of net cash. As a result of these transactions, Frontera could increase its ownership of outstanding common shares of CGX from its current ownership of approximately 45.6% (or 50,351,929 shares) to up to approximately 77.5% if no other shareholder participates in the equity financing and Frontera elects to exercise the conversion right attached to the bridge loan.

Corentyne Petroleum Agreement The Corentyne block contains 1,125,000 net acres offshore Guyana in shallow water, adjacent to the ExxonMobil Stabroek block which has encountered nine discoveries since May 2015. The Utakwaaka well is required to be drilled by November 27, 2019 with an additional exploration well to be drilled by November 27, 2022.

Demerara Petroleum Agreement The Demerara block contains 750,000 net acres offshore Guyana in shallow water, adjacent to the ExxonMobil Stabroek block which has encountered nine discoveries since May 2015. An exploration well is required to be drilled on the block by February 12, 2021 with a further exploration well by February 12, 2023.

The proposed transactions contemplated by the letter agreement remain subject to customary conditions, including the negotiation and execution of definitive agreements between Frontera and CGX and the requisite regulatory approvals. There is no guarantee that definitive agreements will be executed on the terms contemplated, or at all.

The transactions between Frontera and CGX are related party transactions under Multilateral Instrument 61-101, but are exempt from obligations to obtain a formal valuation and approval from a minority of shareholders. The material change report to be filed by CGX in connection with this news release will contain required disclosure regarding such exemptions.

CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin.

Frontera Energy Corporation is a Canadian public company and a leading explorer and producer of crude oil and natural gas, with operations focused in Latin America. The Company has a diversified portfolio of assets with interests in more than 30 exploration and production blocks in Colombia and Peru. The Company’s strategy is focused on sustainable growth in production and reserves. Frontera is committed to conducting business safely, in a socially and environmentally responsible manner. Frontera’s common shares trade on the Toronto Stock Exchange under the ticker symbol “FEC”.

If you would like to receive News Releases via e-mail as soon as they are published, please subscribe here: http://fronteraenergy.mediaroom.com/subscribe.

Advisories:

Cautionary Note Concerning Forward-Looking Statements

This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, the entering into of definitive agreements, the completion of a financing, obtaining regulatory approvals, continued exploration and success thereof , and CGX obtaining sufficient working capital) are forward-looking statements. These forward- looking statements reflect the current expectations or beliefs of Frontera or CGX, as the case may be, based on information currently available to them. Forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the applicable company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: with respect to Frontera, failure to obtain regulatory approval and reach appropriate definitive agreements with CGX; with respect to CGX (and as applicable Frontera), failure to reach appropriate definitive agreements with Frontera, obtain regulatory approval, complete a financing and successfully explore and develop the offshore blocks, and unforeseen costs and expenses; changes in equity and debt markets; perceptions of the applicable company’s prospects and the prospects of the oil and gas industry in the countries where the company operates or has investments; and the other risks disclosed in the applicable continuous disclosure documents under the each company’s profile on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, each of Frontera and CGX disclaims any intent or obligation to update any forward- looking statement, whether as a result of new information, future events or results or otherwise. Although each of Frontera and CGX believes that the assumptions inherent in the forward-looking statements applicable to it are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

View original content:http://www.prnewswire.com/news-releases/cgx-energy-and-frontera-announce-strategic-guyana-joint-venture-agreement-300760351.html

SOURCE Frontera Energy Corporation

View original content: http://www.newswire.ca/en/releases/archive/December2018/04/c6966.html

SOURCE: Frontera Energy Corporation

Frontera: Grayson Andersen, Corporate Vice President, Capital Markets,
+57-314-250-1467, ir@fronteraenergy.ca, www.fronteraenergy.ca;

CGX: Brooks Lyons,
Manager, Commercial & Business Development, +1-832-300-3200, blyons@cgxenergy.com;
Tralisa Maraj, Chief Financial Officer, +1-832-300-3200
Copyright (C) 2018 CNW Group.

CGX Energy announces rig agreement with Rowan

CGX Energy entered into a definitive rig agreement with Rowan Rigs for the provision of rig services for the drilling of the Company’s Utakwaaka-1 well in its Corentyne block. Under the terms of the agreement, the Company has procured the use of the Ralph Coffman offshore jack-up drilling rig. The well is scheduled for Second Quarter, 2019.

Professor Suresh Narine, Executive Chairman, commented:  ‘With the announcement of a Joint Venture with Frontera Energy Corporation and the securing of Rowan’s Ralph Coffman offshore Jack Up Drilling Rig, CGX is on schedule to drill Utakwaaka-1 on or before November 2019. The Ralph Coffman is ideally suited to our well-design and we are delighted to secure this rig at a time when exploration activity on the shelf in the Guyana basin is significantly increasing.’

Source: CGX