CGX ENERGY

(V-OYL) $0.87 -0.18

It’s a lottery ticket folks...and people have to remember how lottery tickets work. It’s addictive, the dreaming of the big payoff, but very few lottery tickets are ever cashed. Which gets us to CGX Energy which is one of those kind of plays with a long 12-year history. Some time in the next six months, we are going to know if this lottery ticket is going to be cashed or not.

Again, the background on the play is offshore Brazil to the south you have those absolutely enormous deep oil plays, some of the biggest in the world and to the north, offshore Venezuela with some of the biggest offshore natural gas resources being discovered anywhere.

In between is Suriname and Guyana and the question remains is some of that big sweet stuff there as well?

Giving the play more credibility over the last year or two has been Tullow Oil, one of the most successful Brit- ish explorers offshore Africa and the analogies have long been that at one point, the area of Africa has been suc- cessful was probably joined to South America in the Guy- ana area.

For Tullow to be farming in big in this area, was kind of like the ‘Good Housekeeping’ seal of approval.

But news yesterday that Murphy Oil has a dry hole on their play offshore Suriname is definitely a touch of reality in the market today.

We got President Kerry Sully to write a comment on yesterday’s developments.

Once again, $60 million and many years work and all that expensive scientific work, has still delivered a $60 million dry hole.

Kerry Sully writes, “Murphy has just announced that their first wildcat well offshore Suriname was dry, and that following weather delays, they will be moving onto their second location. Even though their locations are over 300 km from ours, any success would be very posi- tive for the basin.

However, since the Murphy wells are so far away from the mature source kitchen as we map it, and our locations sit right on the bulls eye of the source kitchen, failure by Murphy does not condemn any of our prospects at the Eocene and Turonian horizons. Mur- phy's next well will test the Paleocene, similar to our Ea- gle Eocene Target. The Atwood Beacon will then drill an Albian test for Inpex, before coming into Guyana to drill our 25% Jaguar well.”

There was recently a very interesting article posted in a Georgetown paper on the area play and for those fol- lowing the CGX Energy adventure, e-mail Debbie for a read at debbie.lewis@canaccord.com.