CGX Energy Inc.

CGX Energy Inc.

June 23, 2011 16:00 ET

CGX Releases New Prospective Resources Estimates by Degolyer and MacNaughton for Corentyne Licence

TORONTO, ONTARIO--(Marketwire - June 23, 2011) - CGX Energy Inc. (TSX VENTURE:OYL) ("CGX") is pleased to announce that an independent resources evaluation (the "Report") has been completed by DeGolyer and MacNaughton of Dallas, Texas, USA (D&M) for two prospects on CGX's Corentyne Offshore Petroleum Prospecting Licence (PPL) located offshore Guyana, South America. Using probabilistic analysis, D&M has estimated a total best estimate (P50) Prospective Resources, as of June 15, 2011, for two prospects of 325 million barrels of oil (see description of Prospective Resources below). The Report will be filed on SEDAR ( and on CGX's website (

The Report is limited to an estimate of the potential gross undiscovered oil and gas prospective resources in two early Cretaceous, Albian prospects (Crabwood and Kabukalli), underlying the Corentyne Offshore PPL. This D&M Prospective Resources Evaluation is in addition to the Gustavson Report of April 15, 2011 which addressed three other prospects. CGX has a 100% working interest in the Corentyne Offshore PPL.

The D&M prospective resources estimates were prepared in accordance with the requirements of Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities Section 5.9 ("NI 51-101"). Capitalized terms related to resources classifications used in this press release are based on the definitions and guidelines in Section 5.3.5 of the Canadian Oil and Gas Evaluation Handbook ("COGEH"), Volume 1.

No commercial discoveries have been made in the offshore Guyana basin and hence there have been no reserves found. Historic well data, regional geology and 2D and 3D seismic data were reviewed by D&M to prepare a probabilistic Prospective Resources Estimate of that portion of the prospects lying entirely within the Corentyne PPL. The following table shows the gross estimated prospective resources expressed in millions of barrels. These estimates have not been adjusted for the probability of geologic success (Pg).

Gross Prospective Oil Resources
Millions of Barrels
Crabwood Albian45218827
Kabukalli Albian19107521
Sum of Prospects643251,348

As specified in the COGEH, the Sums of Prospects are arithmetic sums, and as such do not represent the same probability levels as the estimates for the individual prospects.

Prospective Resources are those quantities of oil and gas estimated to be potentially recoverable from undiscovered accumulations. There is no certainty that the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. Application of any geological and economic chance factor does not equate prospective resources to contingent resources or reserves. In addition, the following mutually exclusive Classification of Resources were used:

Low Estimate - This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P90 confidence level where there is a 90% chance that a successful discovery will be more than this resources estimate.

Best Estimate - This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. This term is a measure of central tendency of the uncertainty distribution and in this case reflects a 50% confidence level where the successful discovery will have a 50% chance of being more than this resources estimate.

High Estimate - This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P10 confidence level where there is a 10% chance that the successful discovery will be more than this resources estimate.

Note that these distributions do not include consideration of the probability of success of discovering and producing commercial quantities of oil, but rather represent the likely distribution of the oil deposits, if discovered.

D&M ( is a global consulting firm providing a variety of services related to the upstream sector of the petroleum industry, including evaluation of the hydrocarbon potential of exploration areas, estimation and classification of reserves to be recovered from new discoveries, verification of hydrocarbon reserves, production forecasting, and appraisal of properties for prospective acquisition, divestiture, issuance of securities, or financing purposes. The firm offers expertise in the primary scientific specialties related to petroleum evaluation including Evaluation of Prospective Resources.

D&M has acted independently in the preparation of the Report. D&M and its employees have no direct or indirect ownership in the property appraised or the area of study described.

With respect to Assumptions and Limiting Conditions within the Report, the Report is limited to a discussion of the potential undiscovered oil and gas Prospective Resources of the subject property. The Report does not attempt to place a value thereon. D&M reserves the right to revise its opinions of reserves and resources, if new information is deemed sufficiently credible to do so. The accuracy of any estimate is a function of available time, data and of geological, engineering and commercial interpretation and judgment. While the resources estimates presented herein are believed to be reasonable, they should be viewed with the understanding that additional analysis or new data may justify their revision and D&M reserves the right to make such revision.

"We're very happy to have this independent concurrence of our work on our new Albian prospects by DeGolyer and MacNaughton" stated Stephen Hermeston, President and CEO, who added, "The arithmetic sum of best estimate for 325 million barrels of recoverable prospective oil resources is in addition to estimates provided in the Gustavson Report for 315 million barrels in Eagle Tertiary prospect and 1,269 million barrels and 1,241 million barrels in the Eagle Lower and Upper Turonian Cretaceous prospects, respectively under our Corentyne PPL."

CGX is a Canadian-based oil and gas exploration company focused on exploration for oil in Guyana, South America. CGX is managed by a team of experienced oil and gas and finance professionals from Canada, U.S.A. and the UK. CGX is financed internationally and has thousands of shareholders worldwide.

This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of Management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of CGX Energy Inc. to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of CGX Energy Inc. to fund the capital and operating expenses necessary to achieve the business objectives of CGX Energy Inc., the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by CGX Energy Inc. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of CGX Energy Inc. should not place undue reliance on these forward-looking statements. Statements in relation to "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources described will be discovered and can be profitably produced in the future.

Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements contained in this press release or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

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