CGX Energy Files Second Quarter Financial Statements, Announces Impairment of the Corentyne Block, and Changes to the Board of Directors

Rhea-AI Summary

CGX Energy (TSXV: OYL) has announced significant developments including a $56.4 million impairment loss on its Corentyne Block exploration assets in Guyana. The impairment follows challenges with the Government of Guyana's (GoG) unwillingness to recognize the Joint Venture's rights during consultation periods.

Despite maintaining that their interests and license remain valid, the company has written down the Corentyne E&E asset's carrying value to $Nil as of June 30, 2025, from $56.2 million in December 2024. Additionally, the company announced major leadership changes, including the resignation of Dr. Suresh Narine as Executive Director and Co-Chairman, and the appointment of Orlando Cabrales as Chairman, along with new directors Alejandra Bonilla and René Burgos Díaz.

Positive

• Company maintains legal assessment confirms their interests and licenses for Corentyne block remain valid
• Strengthened board leadership with appointment of experienced oil & gas executives

Negative

• Significant $56.4 million impairment loss on Corentyne Block exploration assets
• Government of Guyana's unwillingness to recognize Joint Venture rights creates operational uncertainty
• Resignation of key executive Dr. Suresh Narine from leadership positions
• Carrying value of Corentyne E&E asset reduced to $Nil from $56.2 million

Toronto, Ontario--(Newsfile Corp. - August 13, 2025) - CGX Energy Inc. (TSXV: OYL) ("CGX" or the "Company") today announced the release of its unaudited consolidated financial statements and Management Discussion and Analysis for the second quarter of 2025 (together, the "Financial Disclosures"), which include the recognition of an impairment loss of $56.4 million on its exploration and evaluation assets related to the Company's Corentyne Block.

The Company evaluated the Corentyne exploration & evaluation asset's recoverability given the Government of Guyana's ("GoG") conduct and communications, and its unwillingness to recognize the rights of Frontera Energy Guyana Corp. ("Frontera Guyana") and CGX Resources Inc. ("CGX Resources" and together with Frontera Guyana, the "Joint Venture") during the consultation periods, which have since expired.

Although all contractual requirements of the Company have been met and an external legal assessment determined that the Company's interests in the licenses and agreements for the Corentyne block remain valid, the GoG's positions mentioned above have restricted the Company's ability to develop activities under those licenses and agreements. This situation has led to uncertainty regarding the asset's future development and constituted an impairment indicator. Consequently, the Company recognized an impairment of $56.4 million its income statement, and the Corentyne E&E asset's carrying value as of June 30, 2025 is $Nil (December 31, 2024 $56.2 million).

The Joint Venture remains firmly of the view that its interests in, and the license for, the Corentyne block remain in place and in good standing and that the Petroleum Agreement has not been terminated. The Joint Venture remains committed to working with the GoG to resolve these issues amicably, while preparing to assert and protect our legal and contractual rights through all available legal remedies, as necessary.

The Company also announced that, effective today, Dr. Suresh Narine has resigned from his positions as Executive Director, Guyana and Executive Co-Chairman of the Board of Directors of CGX (the "Board") and from his positions with the Company's subsidiaries to pursue academic endeavours. The Company has initiated a search for a permanent Chief Executive Officer and will provide a further update when available.

CGX is pleased to announce the appointment of Alejandra Bonilla and René Burgos Diaz as new directors, and the election of Orlando Cabrales, as Chairman of the Board. In connection with such appointments, Gabriel de Alba has decided to step down from his role as a director of the Company.

"The Board would like to extend our thanks to Gabriel and Suresh for their years of service and strategic leadership of the Company, and wishes them both all the best in their future endeavours," said Orlando Cabrales, Chairman of the Board.

Alejandra Bonilla is the General Counsel & Secretary of Frontera Energy Corporation ("Frontera"). She has more than 20 years of experience in the oil and gas industry and has held different roles in Frontera from 2011 to 2020. From April 2020 to March 2021, she was appointed partner of the energy practice at Dentons Cardenas & Cardenas, an international law firm. In March 2021, Mrs. Bonilla rejoined Frontera, at which time she was appointed General Counsel & Secretary.

René Burgos Díaz is the Chief Financial Officer of Frontera since June 2022. He is a seasoned executive with over 20 years of experience in corporate finance, financial markets, and operational leadership, with deep expertise in Latin America and the energy sector. Prior to joining as Chief Financial Officer, he served on Frontera's Board of Directors from December 2019 to June 2022, including roles on both the Audit Committee and the Compensation and Human Resources Committee.

Following these changes, the Board consists of: Orlando Cabrales (Chairman and Director), Dennis Mills (Director), René Burgos Díaz (Director), and Alejandra Bonilla (Director).

The Financial Disclosures will be posted on the Company's website at www.cgxenergy.com and on SEDAR+ at www.sedarplus.ca. All values in the Financial Disclosures and this press release are in United States dollars unless otherwise stated.

About CGX

CGX 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 deep-water port in Berbice, Guyana.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Cautionary and Forward-Looking Statements:

This press release contains forward‐looking information within the meaning of Canadian securities laws. Forward‐looking information relates to activities, events or developments that CGX believes, expects or anticipates will or may occur in the future. Forward‐looking information in this press release includes, without limitation, statements relating to the Joint Venture's continuing efforts and investments in the Corentyne block, the significant prospective resources discovered therein, the outcome of the search for a new Chief Executive Officer and the licensing status of the Corentyne block. All information other than historical fact is forward‐looking information. Forward‐looking information reflects the current expectations, assumptions and beliefs of CGX based on information currently available to it and considers the experience of CGX and its perception of historical trends. Although CGX believes that the assumptions inherent in the forward‐looking information are reasonable, forward‐looking information is not a guarantee of future performance and accordingly undue reliance should not be placed on such information. Forward‐looking information is subject to a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to CGX and the Joint Venture, including the ability of the Joint Venture to reach an agreement with the Government of Guyana, the impairment and its possible reversal. No assurance can be given that such an agreement with the Government of Guyana will be reached or that the impairment will be reversed . The actual results of the Joint Venture may differ materially from those expressed or implied by the forward‐looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on CGX. CGX's management's discussion and analysis for the year ended December 31, 2024, and other documents CGX files from time to time with securities regulatory authorities describe the risks, uncertainties, material assumptions and other factors that could influence actual results and such factors are incorporated herein by reference. Copies of these documents are available without charge by referring to CGX's profile on SEDAR+ at www.sedarplus.ca. All forward‐looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, CGX disclaims any intent or obligation to update any forward‐looking information, whether as a result of new information, future events or results or otherwise.

For further information: Please contact Daniel Sanchez, CFO and Interim CEO of CGX Energy Inc. info@cgxenergy.com, (281) 747-9980, www.cgxenergy.com.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/262469

FAQ

What caused CGX Energy's $56.4 million impairment loss in Q2 2025?

The impairment was due to uncertainty regarding the Corentyne Block's future development, caused by the Government of Guyana's unwillingness to recognize the Joint Venture's rights during consultation periods.

How much is CGX Energy's Corentyne E&E asset worth as of June 30, 2025?

The Corentyne E&E asset's carrying value has been reduced to $Nil as of June 30, 2025, down from $56.2 million in December 2024.

Who are the new board members at CGX Energy in 2025?

CGX Energy appointed Alejandra Bonilla and René Burgos Díaz as new directors, with Orlando Cabrales elected as Chairman of the Board.

What is the current status of CGX Energy's Corentyne block license?

While CGX maintains its interests and license remain valid and in good standing, there is uncertainty due to the Government of Guyana's positions and unwillingness to recognize the Joint Venture's rights.

Who resigned from CGX Energy's board in August 2025?

Dr. Suresh Narine resigned as Executive Director and Co-Chairman, and Gabriel de Alba stepped down from his role as director.