CGXcannotaffordtofullyinsureGuyanaoperations

- warns shareholders there is no guarantee against multiple financial risks

Whileitcontinueseffortsdrillinganimpressively deep well in the Corentyne Block called Wei-1, Canadian explorer, CGX Energy Inc. was keen to remindshareholdersthatitsoperationsaresubjectto allmanneroffiscalandenvironmentalrisks.

In its latest financial report, the company said offshore operations involve a higher degree of risk thanthoseonshoreduetotheremoteness.Itexplained that oil and natural gas exploration involve many risks that even a combination of experience, knowledge,andcarefulevaluationmaynotbeable to overcome. Expounding on these risks it said, “Fires and explosions on drilling rigs and other offshore platforms are more likely to result in personal injury, loss of life and damage to property due to the remote locations and time required for rescuepersonneltogettothelocation.”

CGX said too that blow-outs and spills are more likely to result in significant environmental damage to the marine environment and can be difficult to contain and difficult and expensive to remediate. CGX said, “There can be no assurance that these risks can be avoided,” while adding that the occurrence of any of these events may have a materiallyadverseeffectonthecorporation.

In accordance with industry practice, CGX also told shareholders that it has normal and customary insurance coverage to address a certain number of these risks. It said however that the nature of these risks is such that “liabilities could exceed policy limits, in which event the Corporation may incur significantcosts.”

Additionally, CGX said such insurance may not beavailableinthefuture,maybeprice-prohibitive,or contain limitations on liability that may not be sufficienttocoverthefullextentofsuchliabilities.It

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