The government has approved the transfer of Century Guyana Ltd's 100% interest in the Pomeroon prospecting licence (located off shore Guyana) to CGX's wholly owned subsidiary, CGX Resources Inc, a CGX statement said.
The Pomeroon licence is approximately 11,254 sq km (2,781,000 acres) and is located adjacent to CGX's 100% owned annex portion of the Corentyne licence. Water depths in the Pomeroon licence range from 20 to 170 metres, the statement said, adding that the Pomeroon petroleum prospecting licence had been extended to November 19, 2009 by the Government of Guyana.
The statement said during the first phase of the first renewal period terminating May 19, 2005, CGX's work commitment includes reprocessing 330 kilometres of the approximately 6,000 kilometres that have been shot on the licence, and re-interpreting and integrating regional geological, aeromagnetic, gravity and seep surveys.
If CGX elects to renew the licence at the end of the first phase, subsequent work would include new seismic surveys and/or drilling exploration wells, the statement said. If a significant discovery were made, that portion of the licence would be converted to a 25-year production licence.
CGX says all conditions precedent to the purchase and sale agreement previously announced on November 13, 2003 have now been satisfied and as part of the 100% acquisition, CGX has agreed to pay to Century Guyana Ltd US$150,000 plus two million common shares of CGX, the issuance of which remains subject to regulatory approval.
With this acquisition, CGX now holds an interest in 9.8 million acres (approximately 40,000 square kilometres), (7.7 million acres net) both onshore and offshore in Guyana.
The government has the term of the original Corentyne licence (2.8 million acres) to June 24, 2011.
CGX Energy Inc is a Canada-based oil and gas exploration company exploring for oil in the Guyana basin.