Canadian oil company Frontera Energy (TSX: FEC) is in the process of examining results from its recent oil discovery in Guyana and will spend the next few months determining how it plans to proceed with development, according to recent filings and public comments.
If the block, which it charactered as having “significant potential,” meets the necessary parameters, the Calgary-based company will consider advancing its exploration license to the development phase for its Wei-1 well. This plan, as outlined by Reuters, was supported by comments from a company representative during its recent second quarter investors call.
Photo: Frontera Energy’s Quifa field in Meta, Colombia. (Credit: Frontera Energy)
“We are analyzing the significant amount of data we got from the well, which will take a couple of months,” said the executive. “That will tell us the potential of the block. Any move we make in relation with the license will depend on that analysis.”
Frontera, which reported net income of $80.2 million USD in the second quarter, spent $154.9 million USD in capital expenditures in the quarter, and nearly half ($72.8 million USD) of those expenditures were related to its Guyana Wei-1 exploration well, according to the second quarter results report the company released last week.
In its reporting, Frontera provided additional details about the Wei-1 well, which is roughly 200 meters offshore from Georgetown in the Corentyne block. “The Joint Venture [with CGX Energy] discovered 210 feet of hydrocarbon-bearing sands in the Santonian horizon confirmed by wireline logs and extensive core samples,” according to the filing. “The rock and fluid properties of the Santonian are currently being analyzed by an independent third-party laboratory to define net pay and a basis for the evaluation of this interval.”
In line with an existing agreement between the two companies, Frontera is expected to increase its participating interest in the Corentyne block t0 72.7% while CGX Energy will retain a 27.3% participating interest.
In addition toe the Wei-1 well, Frontera also recorded a significant discovery in Guyana, named Kawa-1, in 2022.