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What Drove CGXEF Stock Up 32% Last Session?

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After seeing a rise of 31.93%, CGX Energy Inc (OTCPk: CGXEF) closed at $2.19, taking its market cap to $629.82M. CGXEF stock traded 1.91M shares, a volume which was greater than its average daily volume of 106.54K. Additionally, CGXEF has traded in an intraday range of $1.65 to $2.20. There are 287.59M shares outstanding in the pink sheets CGXEF, compared to 74.78M shares float. Because CGXEF stock increased when no current news was available, there are some reasons to believe that recent developments will enable us to gain additional insight into CGXEF.

How has CGXEF been recently?

Canada’s CGX has four exploration licenses in the Guyana-Suriname basin. Located in the frontier basin of South America, the basin features both proven hydrocarbon systems and deep water plays that can be drilled up to 200 feet underwater. U.S. Geological Survey (USGS) has identified the Guyana Suriname basin as the world’s second most promising unexplored oil basin, with recoverable oil reserves and gas reserves of over 13.6 billion barrels and 39 trillion cubic feet of reserves, respectively. CGXEF is well-positioned to capitalize on Guyana’s Atlantic Basin, with more than 10 prospects and leads, and an independent P50 resource estimate of 3 billion barrels of potential.

It was announced last month that CGX Energy had completed its loan agreement with Frontera Energy Corporation (“Frontera”).

  • The CGXEF loan agreement stems from the recent US$19 million loan announcement made on April 16, 2021.
  • The loan allows CGXEF to continue financing its share of the costs for the Demerara, Berbice, Corentyne blocks, and to facilitate other budgeted expenses.
  • Related party transactions between CGXEF and Frontera are eligible for Minority Security Holder Protection under Multilateral Instrument 61-101.
  • Additional Information
  • Frontera has the option to acquire a maximum of 26,685,393 Common Shares upon the conversion of the loan.
  • On a partially diluted basis, Frontera would have 76.07% of the issued and outstanding Common Shares of CGXEF.
  • There is a statutory hold period expiring on September 29, 2021 for Common Shares to be issued in connection with the conversion of the Loan.
  • The TSX Venture Exchange must accept CGXEF’s loan before it can be finalized.

Partnership for JV:

Both CGX Energy (CGXEF) and Frontera are also in a joint venture to explore the Corentyne block offshore Guyana for petroleum. Maersk Drilling Holdings Singapore Pte Ltd. (Maersk) has recently been engaged by CGX Resources Inc. to provide a semi-submersible drilling unit and associated services to drill the Joint Venture’s Kawa-1 well.

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