Presentation to the Calgary Chapter of the Association of International Petroleum Negotiators

Transcription

1 Early Mover Gun Boats UNCLOS Leading Edge Technologies Time to Test the Theories Benefits to the Region Presentation to the Calgary Chapter of the Association of International Petroleum Negotiators

2 Executive Summary Independent E&P focused in a highly prospective basin Committed to 2 wells in next 12 months Success would lead to multi-prospect potential 8.6 million gross acres (7.0 million net acres) in Guyana Part of the emerging Equatorial Atlantic Margin Play West African - Ghana (Jubilee, Tweneboa) to Sierra Leone (Venus) Brazil OGX s shelf margin stratigraphic discoveries Guyana/Suriname Basin surrounded by major companies (Exxon, Total, Shell, Tullow, Repsol, Murphy, Noble, Inpex) Capitalization C$190million market capitalization on TSX-V (Symbol OYL) mm shares outstanding, million fully diluted US$13.5 million cash on hand Insiders hold 4.5% directly 2

3 Directors and Officers Kerry Sully Warren Workman James Fairbairn John Clarke Denis Clement John Cullen Edris K. Dookie Adrian Jackson Oliver Lennox-King Charlotte May President, CEO and Director 39 years experience. Past CEO of Ranchmen s Resources Vice President, Exploration 35 years experience. Previously with Amoco, Unocal and Ranchmen s CFO CA with 20+ years experience with publicly-traded companies Vice President, Business Development 35 years experience. E&P with Texaco and Candax; O&G Analyst with Deutsche Bank and Octagon Director 27+ years experience in corporate finance, law and management. Director of a number of public and private resource companies Co-founder and Director 27+ years experience. Co-founder and Director of Candax Energy Inc. and Southeast Asia Mining Corp. Co-founder CGX Energy Executive VP of CGX Resources and President of ON Energy Independent Director Equity Analyst with Investec Asset Management based in London, UK Independent Director Chairman of the Board of Fronteer Development and Aurora Energy Resources Investor Relations 20+ years experience in the institutional brokerage industry focused on junior oil and gas companies 3

4 Proven Hydrocarbon System But Under-explored explored Guyana Offshore Only 11 wells and 21,000 km 2D from 1958 to 2007 Abary Shell 1975 In-well blow out 37 API oil in mud Tambaredjo and Calcutta > 1.0 billion barrels OOIP 4

5 First Use of Solid Sentry Cable (20,000 ) On Western Geophysical s Kenda

6 Shot 1800 km Solid-State State 2D Seismic in km CGX MATURE CANJE SOURCE KITCHEN Georgetown CGX Horseshoe West Berbice Berbice Canyon Canyon Eagle Wishbone AREA OF SEISMIC SURVEY Horseshoe East AREA OF SEISMIC SURVEY Guyana TAMBAREDJO OIL FIELD 58 Suriname 56

7 Eagle & Wishbone Turbidite Fans 1999 Image from Paradigm

8 The World was Watching

9 June 2, km from shore 300 feet of water setting legs in preparation for drilling

10 Leave the area within 12 hours or the consequences will be yours!

11 Dutch and British Left Region Untidy New River Triangle Dutch and Suriname challenged choice of tributary for Corentyne River Corentyne River Traditional thalweg boundary or northwest shore? Offshore N10E or historical equidistant boundary of N34E

12 Overlapping Maritime Border Claims Both countries full signatories to UNCLOS Eagle west of hypothetical median line

13 Failure of Bilateral Political and Commercial Solutions 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)

14 Guyana Files Claim under United Nations Convention on Law of the Sea (UNCLOS) February 24, Jurisdiction 2. Maritime Border 3. Use of Force 1. Damages CGX Undertakes to pay Guyana s Legal Expenses

15 Annex VII Arbitral Tribunal H.E. Judge L. Dolliver M. Nelson, President Professor Thomas M. Franck Dr. Kamal Hossain Professor Ivan Shearer Professor Hans Smit Tribunal Hydrographer: Mr. David Gray Registry: Permanent Court of Arbitration

16 Counsel For Guyana Addressing the Tribunal Sir Shridath Ramphal, S.C., Co-Agent for Guyana Mr. Paul S. Reichler, Foley Hoag LLP, Co-Agent for Guyana Professor Payam Akhavan, Associate Professor, Faculty of Law, McGill University, Co-Agent for Guyana Professor Philippe Sands, Q.C., Professor of Law, University College London Professor Nico Schrijver, Professor of Public International Law, University of Leiden

17 Guyana Expert Witness and Advisors Expert Witness Robert W. Smith Former Geographer with U.S. Dept of State & Office of Ocean Affairs Expert Advisors Dr. Galo Carrera, Scientific/Technical Expert, geodecist and hydrographer, GeoMetrix Inc, Dartmouth, NS Mr. Scott Edmonds, International Mapping Associates, cartographer

18 Counsel For Suriname Addressing the Tribunal Mr. Hans Lim A Po, Co-Agent for Suriname Mr. Paul C. Saunders, Co-Agent for Suriname, Attorney, Cravath, Swaine & Moore LLP Professor Christopher Greenwood, CMG, QC, Professor of Law, Essex Court Chambers Mr. David A. Colson, Attorney, LeBoeuf, Lamb, Greene & MacRae LLP Professor Sean D. Murphy, Professor of International Law, The George Washington University Law School

19 Counsel For Suriname Addressing the Tribunal Professor Bernard H. Oxman, Professor of International Law, University of Miami School of Law Professor Donald M. McRae, Professor of International Law, University of Ottawa Professor Alfred H. A. Soons, Professor of Public International Law, Utrecht University

20 Suriname Expert Advisors Mr. Coalter Lathrop, Cartography Consultant, Sovereign Geographic, Inc. Boundary Consultation and Cartographic Services Mr. David Swanson, Cartography Consultant, David Swanson Cartography

21 Some Challenges Guyana denied access to Dutch Archives New headland appeared offshore Suriname Use or threat of force Jurisdiction Maxim Land controls the Sea

22 Point 61 - Jurisdiction

23 The Award September 17, 2007 The Tribunal has jurisdiction There are no relevant circumstances in the EEZ which would require an adjustment to the provisional equidistant line Suriname s action constituted a threat of the use of force in contravention of UNCLOS, the UN Charter and general international law As a result of this Award, Guyana now has undisputed title to the area where the incident occurred

24 Maritime Boundary Territorial Sea 1. Based on historical arrangements, Starting Point of Maritime Boundary is on intersection of low water mark and N10E line projected from Marker B at Point 61, continuing 3nm 2. Based on special circumstances, between 3nm and 12nm, a line drawn diagonally by the shortest distance to join the 1 st segment with the award in the EEZ Exclusive Economic Zone 1. Equidistant line

25 High Activity Post Decision Operators Preparing to Drill Potential drilling within 12 months 25

26 CGX Extends Prospects into the Albian Eagle Location Shelf Margin Carbonates Sand Rich Shelf Cond uit fo r san d into ba s i n Corentyne Apron Sand Deposits Incised Va lley High Quali ty Source Roc k Albian She lf Margin Carbonate s ± B!i MAH#2!i Jur a MAH#1 JAG-1 ABARY#1!#!h EG-1!# HORSESHOE!ª A 26 CO-1!h ssic 25 km S yn ~6,200 m rift Sed im e n ts Olig o Ch Maanr cene nl Eoc els e ne San ds Maa s t r Sa n ic d s h t i an Ea g l Cam e pan ia Eag le T n uro nia n

27 CGX Portfolio 16 Prospects and Leads Success in Jaguar or Eagle leads to multiple opportunities -80 m -90 m -500 m -200 m -100 m m ± Primary Prospects Turonian Basin Floor Fan Eocene Turbidites -60 m i! i! -70 m -50 m JAG-1!#! h AB-1 EG-1!# Leads Maastrichtian Sand Campanian Turbidite Albian / Aptian Reef Berbice Canyon Corentyne Incised Valley Cretaceous Shelf Edge Block 30 South Block 31! ª Proposed Location 20 CO-1! h km Eocene Campanian Turonian Albian -80 m 27

28 Guyana Good Business Regime 28

29 Benefits to Guyana Assuming a Large Discovery Assumptions Discovery 5 x 100 million barrels or 1 x 500 million barrels Production 50 million barrels per year 140,000 barrels per day Crude Price $50 per barrel Risk Eagle Shallow Min, % Max, % Source Structure Reservoir Seal Overall 4 43 Mean, % 19

30 Guyana s s Share of Cash Flow (Consistent with Best-Regarded Regimes) Gross Revenue Split Country Share of Cash Flow Other State s % Cash Flow: National Post (Wood Mackenzie)

31 Gov t Revenue Grows 3.5 times (Average Full-Cycle Share) 2007 Revenue US$ 400 million Does not account for multiplier effect Guyana Profit Oil - hypothetical 50 mm bbls per year $50 per barrel

32 1 Giant Discovery Large Impact on Employment Direct Employment Hibernia (884 million barrels) development 32,250 person-years long-term 650 persons Multiplier Effect Nova Scotia (Sable, Panuke, etc) 450 local companies 40,000 employees 32

33 CGX Building Staging Base Grand Canal Industrial Estate No surplus infrastructure in Guyana Trinidad has been the supply base for oil exploration CGX in process of building a new port on the Berbice River 90 m wharf 11 m water depth 55 acre staging and storage Service eastern Guyana plus access to northern Brazil 33

34 The Triumph of UNCLOS Basin Open for Exploration Proven hydrocarbon system Leading-edge exploration technologies High activity levels - many contractors Discovery will have a dramatic impact on the region Business opportunities Employment Training Revenue 34

35 (TSX-V: OYL) May 2010