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CGX ENERGY INC.

CGX ENERGY INC. Waking the Sleeping Giants. OYL.U. USGS Predict 6 Giant Oilfields. USGS estimate 15.3 billion barrels oil 42 tcf gas ranked 2 nd as under explored basin estimate 117 oil fields 24 elephants > 100 million barrels

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CGX ENERGY INC.

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  1. CGX ENERGY INC. Waking theSleeping Giants OYL.U

  2. USGS Predict 6 Giant Oilfields • USGS estimate 15.3 billion barrels oil 42 tcf gas • ranked 2nd as under explored basin • estimate 117 oil fields • 24 elephants > 100 million barrels • of which 6 are giants > 500 million barrels Guyana/SurinameBasin Venezuela Guyana Suriname

  3. Mean Undiscovered Conventional Oil Source: United States Geological ServiceWorld Petroleum Supply 2000

  4. Regional Activity • Trinidad • 24 tcf reserves • Deltana Platform • 38 - 80 tcf potential • 5 new concessions • $41 mm bonuses • Tambaredjo • OOIP 900 billion barrels • 174 billion barrels recoverable

  5. Feb 2003 Visit to Suriname

  6. Land Rig - Tambaredjo • 14,000 bopd • 625 wells • Drilling 75 wells per year

  7. Our Concessions • 6.6 mm acres gross • 4.5 mm acres net • Corentyne Block (100%) • Offshore • Eagle • Wishbone • Annex • Onshore • Georgetown Block (25%)

  8. Area of Overlapping Border Claims • Guyana claims a border of N33E • Suriname claims a border of N10E • Inability to resolve differences has frozen exploration in the basin

  9. Bilateral Negotiations not Progressing • Impediments to a Bilateral Solution • “strength of feeling by the respective populations • the firm and apparently intractable positions adopted by both sides • the history of past efforts” • “Easier for the people of both countries to accept settlement terms, which are arrived at by processes and procedures, regarded as independent and/or which employ a judicial approach” (Rashleigh Jackson)

  10. A Logical Resolution • For maritime space • both countries are signatories to and have ratified the UN Law of the Sea Convention • Where complications such as islands do not exist, this process can be fairly expedient • For land boundary • the OAS has a mechanism for helping member states to solve border problems

  11. Regional Benefit of Awakening Giant1 Giant – Would Double Guyana’s GDP • Assumptions • 500 million bbls • 50 million bbls/year • US$ 20 per bbl Source: Bank of Guyana to end 1999

  12. 1 Giant – Would Double Gov’t Revenue Year 1 of production gov’t revenue ~ US$ 100 million Year 5 of production gov’t revenue ~ US$ 400 million Does not include tax on workers and services

  13. Guyana’s Fiscal Regime Promotes Exploration Source: Int’l Petroleum Encyclopedia 1998 Guyana: APEX Eng Sept 1998

  14. Work Commitment from June 1998

  15. Our Shareholders • OYL.U on TSXV • 52 week hi US$.40 low US$0..145 • shares o/s 48.6 million, f/d 54.2 million • over 5000 shareholders • institutions in UK, USA, France, Germany, Canada • raised US $16 million • Sold Canadian properties for US $0.6 mm • current working capital US $1.1 million

  16. Technical Risk– Exploring for Turbidite Giants • Source rock / timing – 95% • Seal – 75% • Reservoir – 50% • Structure – 75% • Oil vs gas – 75% • Overall Probability of Success – 20%

  17. Source Rock & Timing – 95% • Canje Formation • 2-6% TOC • > 300 metres thick • mature – 95% in oil window • oil in Tambaredjo typed to Canje Source • equivalent age to La Luna source rock in Venezuela

  18. Seal – 75% • Abary #1 • 6000’ shale seal • 23‘ turbidite sand • mud kick at 2000 bpd • 34.5o API oil in mud • Shell drilled in 1974 • Eagle and Wishbone • seismic tied to Abary • turbidite sand thickness greater than 600 feet

  19. Reservoir – 50% • main risk is sand quality • over 5000’ onshelf sand in Horseshoe #1; • Oligocene turbidite fans: Eagle and Wishbone; • Turonian source rock: mature Canje formation over 300’ thick • Miocene seal: over 6000’ of shale in Abary #1

  20. Structure – 75% • Top of fan at Eagle and Wishbone marked by coincident amplitude and AVO anomalies; • Flat spot is interpreted as oil-water contact; • Draping in Miocene shales is observable • Eagle anomaly is about 13 km in width and Wishbone about 7 km; • Eagle defined on 8 other strike lines at 2 km intervals. Eagle Wishbone

  21. Oil vs Gas – 75% • Abary #1 tested oil • buoyancy considerations over 1700 feet of structure • Amplitude and AVO anomalies terminate simultaneously at interpreted oil-water contact and at updip pinchout on paleo-shelf; • Eagle anomaly is over 15 km in length.

  22. Turbidite Fan Targets– 20% Probability of Success • Geological model equivalent to Campos Basin, Brazil • Similar age to turbidite reservoirs in East Venezuela Basin and Trinidad • “Giant” and “near-giant” size

  23. Toe Thrust Line 31 Amplitude Lead with Flat event Annex Lead Map

  24. 6 km Line 31 Toe Thrust Lead

  25. On depth Flat Reflections High amplitude package Annex Toe Thrust Detail

  26. Line 4 Amplitude Lead Line 25intersection 8 Km

  27. Annex Corentyne Block • Acquired 3800 Km of Deminex data • Reprocess and interpret • Wide line spacing • Identified Leads need definition 20 km Oil show Well Location

  28. Dip Line 25 Amplitude Lead Flat Reflection Line 4 Intersection 10 km

  29. Detail on Flat Reflection Line 25

  30. Onshore Block

  31. Onshore Block with Staatsolie Nickerie Geochemical survey

  32. Onshore Block Geochemical and Oil /Gas Shows Onshore Oil Fairway

  33. Geochemical Surveys • GMT, Gore • Micro seepage vs Seepage • Quantification and maturity of source • Aeromag, gravity • Phase 1 Capital 0.5 MM$ US explore using various structure

  34. Seismic, then drilling • Use geochemical and potential fields to define seismic targets and and follow up with drilling • Reduce amount and costs for seismic and focus on drill targets to reduce cycle

  35. CGX Energy Inc. For more information Please visit our website www.cgxenergy.com

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