Mr. Todd Durkee reports

CGX ENERGY FILES YEAR-END 2023 AUDITED CONSOLIDATED FINANCIAL STATEMENTS

CGX Energy Inc. has released its audited consolidated financial statements for the year ended Dec. 31, 2023, together with its management's discussion and analysis. These financial disclosures will be posted on the company's website and on SEDAR+. All values in the financial disclosures are in U.S. dollars unless otherwise stated.

Company highlights

Wei-1 well status

As previously disclosed, the Wei-1 well was drilled by the company and Frontera Energy Corp., joint venture partners. On June 11, 2023, the company reached a significant milestone with the Wei-1 well, achieving a depth of 20,450 feet. Subsequently, wire line logging operations were completed by June 23, 2023, and operations related to Wei-1 concluded by July 5, 2023, resulting in the release of the drilling rig.

During the drilling process, the Wei-1 well encountered multiple oil-bearing intervals in the northern part of the Corentyne block. These formations span various geological ages, including Maastrichtian, Campanian and Santonian. Notable findings include the presence of medium sweet crude oil with an API of 24.9 in the Maastrichtian interval. The Campanian interval confirmed the presence of moveable hydrocarbons through downhole fluid analysis.

The joint venture believes that the rock quality discovered in the Maastrichtian horizon in the Wei-1 well is analogous to that reported in the Liza discovery on Stabroek block. Results further demonstrate the potential for a stand-alone shallow oil resource development across the Corentyne block. The joint venture has discovered 228 feet of net pay in Kawa-1 and 114 feet of net pay in Wei-1, as summarized in the attached table.

An independent third party laboratory conducted an analysis of the rock and fluid properties of the Campanian and Santonian intervals in the fourth quarter of 2023. These data showed low permeabilities in the Kawa-1 and Wei-1 penetrations.

The joint venture believes that approximately 514 million to 628 million barrels of oil equivalent PMean unrisked gross prospective resources may be present in the Maastrichtian horizons alone and that additional potential upside may exist in the deeper Campanian and Santonian horizons. The joint venture believes the Maastrichtian has the potential for a stand-alone commercial development, with potential upside in the deeper zones.

2023 joint operating agreement amendment

On Aug. 9, 2023, CGX Resources Inc. and Frontera Energy Guyana Corp., a wholly owned subsidiary of Frontera, entered into an agreement to further amend the joint operation agreement dated Jan. 30, 2019, and subsequently amended.

Pursuant to the 2023 JOA amendment, the company agreed to transfer an additional 4.7-per-cent participating interest in the Corentyne block to Frontera Guyana in exchange for Frontera Guyana financing CGX's participating interest share of the costs associated with the Wei-1 well for up to approximately $16.5-million.

Pursuant to the 2023 JOA amendment, if the final amount paid by Frontera Guyana as a carry toward CGX's participating interest share of Wei-1 expenses is less than $16.5-million, the company has the right to receive from Frontera Guyana a reassignment of a portion of said 4.7-per-cent interest equivalent to the portion of the consideration that is not used toward the payment of CGX's participating interest share of costs associated with the Wei-1 well. The 2023 JOA amendment was completed during the fourth quarter of 2023, pending approval from the government of Guyana.

According to the final cost of the Wei-1 well, the company would have the right to receive from Frontera Guyana a reassignment of 0.78-per-cent participating interest in the Corentyne block. However, pursuant to that certain closing letter dated March 7, 2024, between the company and Frontera Guyana, the company has instead agreed to receive from Frontera Guyana: (i) the reassignment of a 0.18-per-cent participating interest in the Corentyne block; (ii) $1.5-million cash consideration to cover certain other operating expenses of the company; and (iii) $600,000 in settlement of other accounts payable related to the joint operations.

Pursuant to the 2023 JOA amending agreement and the closing letter, the company holds a 27.48-per-cent working interest in the block, and Frontera Guyana holds the remaining 72.52-per-cent working interest in the block.

Houlihan Lokey supporting active pursuit of strategic options for Corentyne block

Houlihan Lokey, a leading global investment bank and capital market expert, is supporting active pursuit of strategic options for the Corentyne block, including a potential farm-down, as it seeks to develop this potentially transformational oil investment in one of the most attractive oil and gas destinations in the world today, Guyana. A data room has been opened, and management presentations are under way. There can be no guarantee that the review of strategic options will result in a transaction.

Berbice deepwater port

The in-river construction of the 50-by-12-metre access trestle built from the quayside yard westward into the Berbice river has been completed on budget and with no health, safety and environment related incidents. The Berbice deepwater port facility intends to serve as an offshore supply base for the oil and gas industry and as a multipurpose terminal to service agricultural import and export, and containerized and specialized cargo including aggregates for construction purposes.

The announcement of significant infrastructure projects in Region 6 by the government of Guyana motivates the completion of the cargo aspects of the port earlier, especially with respect to the handling of aggregates and other construction materials, which must be imported into the region from elsewhere in the country and offshore. Initial cargo operations at the port is expected to commence in the second quarter 2024, projected based on expressed interest from third parties to utilize the port for the importation and storage of aggregates. The port will be capable of loading and offloading barges, mainly aggregates, from the completed trestle, as well as the storage of material at the completed port yard. This will require the construction of a ramp to access the trestle as well as the installation of mooring piles at the trestle to aid in bringing barges alongside. Operation of the full cargo terminal aspects of the port is forecasted for the end of 2024, and operation of oil and gas support is forecasted for 2025, subject to construction schedules, financing and supply chains. Grand Canal Industrial Estates Inc. continues to develop and foster partnerships between Brazilian and Guyanese companies, necessary to begin handling cargo from and to Roraima and Amazonas, the northern states of Brazil.

About CGX Energy Inc.

CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname basin and the development of a deepwater port in Berbice, Guyana.

We seek Safe Harbor.