In a press release, CGX said the agreement covers AGIP's entire 25% participating interest in the Georgetown Block, located offshore, in the Guyana Suriname Basin.

The Georgetown Block licence issued by the Government of Guyana is about 11,315 sq km in size and is located between CGX's 100% owned Corentyne Block, the company reported. It said water depths in the concession range from 30 to 200 metres.

Maxus Guyana Ltd., a subsidiary of Repsol-YPF, holds the other 75% interest in this block and is the operator under a joint operating agreement with AGIP.

CGX said that it in 1999, along with Maxus/AGIP, completed a 3,500 km joint 2D seismic survey over both the Georgetown and Corentyne Blocks.

Mr. Warren Workman, Vice President, Exploration for CGX stated, "Our analysis of the 1999 data is very positive. We have identified at least three turbidite structures running northwest from our Eagle and Wishbone structures."

"These features are comparable in a real extent to our Eagle and Wishbone targets. The most attractive feature is located next to Eagle and within three km of Shell's 1974 Abary #1 well that had the most significant oil shows in the basin", he said.

According to Workman, the other two turbidite features are outside the area of overlapping border claims being made by the governments of Guyana and Suriname.

"There are some additional features on the northern portion of the Georgetown Concession where wells drilled in the 1970's had several oil and gas shows", he added.

Mr. Kerry Sully, President and CEO of CGX Energy Inc. said, "We are delighted to have the opportunity to increase our position in this potentially prolific basin as analysed by the United States Geological Survey Assessment of World Petroleum Resources."

"When we close the acquisition, CGX will have an interest in five large turbidite targets identified on the seismic data", he said.

The final terms of the sale will be released upon the execution of a Sale and Purchase agreement and receipt of the required consents, CGX said.

CGX believes there are world-class oil deposits in the Eagle, Wishbone and others sites in its concession.

Its oil exploration was stymied in June 2000 when Suriname gunboats expelled a CGX rig from drilling in the concession.

Guyana and Suriname have resumed talks on the border issue that sparked the incident and the border commissions of the two countries are due to meet soon to continue discussions.