CGX Energy Inc. (TSXV: OYL) (“CGX”) and Frontera Energy Corporation (TSX: FEC) (“Frontera”), joint venture partners (the “Joint Venture”) in the Petroleum Prospecting License for the Corentyne block offshore Guyana (the “License”), announced today that the Joint Venture recently received a communication (the “Letter”) from the Government of Guyana (the “Government”).
The Government has taken the position that the License, together with the Joint Venture’s Petroleum Agreement with the Government (as amended, the “Petroleum Agreement”), have terminated and that, in the opinion of the Government, there are no reasonable grounds to grant any extensions to the Joint Venture in respect of its appraisal or exploration obligations under the License or the Petroleum Agreement. Furthermore, the Government says that, if it is determined that the License has continued, or that the Joint Venture holds any other type of licence contemplated by applicable legislation, the Letter serves as a 30-day notice of the Government’s intention to cancel such license.
Although the Government argues that the License has terminated, it invites the Joint Venture “on or before February 22nd, 2025, (…) to submit any representations [the Joint Venture] wish[es] [the Government] to consider prior to [the Government] making [its] final decision as to whether to not cancel any license that may exist. Any such license will cease to have effect on March 10, 2025, unless any representation that may be made are favourably considered”. Additionally, the Government also states its willingness “to extend the time for good faith negotiations to the dates set forth above so as to allow receipt and consideration of any representation” the Joint Venture makes. The Letter states that such invitation and intention to cancel are in no way any admission that the Joint Venture currently holds a licence of any nature.
The Joint Venture remains firmly of the view that its interests in, and the License for, the Corentyne block remain in place and in good standing and the Petroleum Agreement has not been terminated. Notwithstanding the foregoing, the Joint Venture is assessing all legal options available to it to assert its rights and will respond to the Government.
The Joint Venture looks forward to expeditiously resolving this matter and continuing its multi-year efforts and investments to realize value for the people of Guyana and its shareholders from the Corentyne block.
