CGX Energy : Announces Guyana Resource Evaluation Report - Successful Rescheduling of Demerara Work Commitment

NEWS RELEASE CGX ENERGY INC.

(TSX-V | OYL)

February 16, 2021

CGX ENERGY INC. ANNOUNCES GUYANA

RESOURCE EVALUATION REPORT

Successful Rescheduling of Demerara Work Commitment

Toronto, Canada, February 16, 2021 - CGX Energy Inc. ("CGX Energy" or the Company") and it's joint-venture partner Frontera Energy Corporation (TSX: FEC), are pleased to announce the completion of an independent Prospective Resource study and report (the "Resource Report") in respect of the Corentyne North Area, Corentyne Main Area and Demerara Block, offshore Guyana. The Company also disclosed the successful renegotiation of the Joint Venture's work commitments with respect to its Petroleum Prospecting License ("PPL") for the Demerara block offshore Guyana and the Company's Berbice block onshore Guyana.

Gabriel de Alba, Co-Chairman of the Board of Directors, commented:

"We thank the Government of Guyana for its continued support and partnership, which are essential to the long-term success of this strategic initiative for the benefit of all stakeholders. As confirmed by the independent resource valuation commissioned, the Guyana basin offers the Joint Venture access to a leading offshore oil opportunity. We expect a robust Guyana work program with the advancement of our exploration wells, as we continue executing on our plan to realize this value for our shareholders."

Independent External Prospective Resource Report

CGX Resources Inc. ("CRI"), a wholly owned subsidiary of CGX Energy, contracted McDaniel and Associates Consultants Ltd. ("McDaniel"), an independent qualified reserves evaluator, on September 10, 2020 to complete an independent Resource Report in respect of the Corentyne North Area, Corentyne Main Area and Demerara Block. The Resource Report was prepared as of August 31, 2020, in accordance with the resource definitions and standards set out in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH").

A total of 32 prospects have been identified in both blocks (5 in the Demerara block and 27 in the Corentyne block) with a mean volume of 4,940 MMboe unrisked and 884 MMboe risked.

The independent external Resource Report was completed on October 21, 2020 and certain information contained in the Resource Report is summarized below:

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CRI's Working Interest Prospective ResourcesProduct by Block/Area (4)(5)

Unrisked (1)(2)

Risked ResourcesWI, %LowMedianMeanHigh

Mean (3)Sub-Total Corentyne North Area

Crude Oil, MbblNatural Gas, MMcfCondensate, Mbbl

• 66.667% 822,253

• 66.667% 1,799,515

• 66.667% 58,260

  1,869,504 4,013,660 143,657

  2,240,604 4,749,552 176,935

  4,153,754

  396,141

  • 8,680,777 1,000,776

  339,980

  41,697

  Barrel of Oil Equivalent, Mboe (6)

  1,180,432

  2,682,105

  3,209,130

  5,940,530 604,634

  Sub-Total Corentyne Main Area

  Crude Oil, MbblNatural Gas, MMcfCondensate, Mbbl

• 66.667% 76,820

328,187

66.667% 66.667%

• 611,173 2,109,047

500,251 2,993,385

1,153,101 86,703

6,554,714 401,008

38,495

• 141,307 210,048

  473,256 26,719

  Barrel of Oil Equivalent, Mboe (6)

  217,177

• 821,001 1,209,196

2,718,809 180,257

Sub-Total Demerara BlockCrude Oil, Mbbl

Natural Gas, MMcfCondensate, Mbbl

66.667% 66.667% 66.667%

126,933 136,849 0

359,434 397,947 0

438,962 500,033 0

857,028 83,347

999,333 95,213

0

0

Barrel of Oil Equivalent, Mboe (6)

149,741

425,759

522,301

1,023,583 99,216

Total Prospective Resources, Mboe (6)

1,547,350

3,928,865

4,940,628

9,682,922 884,106

Notes:

1) There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

(2) The Unrisked Total is not representative of the Portfolio Unrisked Total and is provided to give an indication of the resources range assuming all of the prospects are successful.

(3) All of the prospective resources assigned as part of this assessment have been estimated probabilistically as this is the most appropriate method given the high degree of uncertainty in the various input parameters. Distributions of the various reservoir and fluid parameters were determined, based on parameters from existing wells/discoveries in the area or general worldwide data, and probabilistic calculations of the unrisked OOIP/original gas-in-place ("OGIP") and recoverable resources were prepared for each prospect.

(4) The risked resources have been risked for chance of discovery and chance of development (COD). The chance of development is defined as the probability of a project being commercially viable. Quantifying the chance of development requires consideration of both economic contingencies and other contingencies, such as legal, regulatory, market access, political, social license, internal and external approvals and commitment to project finance and development timing. As many of these factors are extremely difficult to quantify, the chance of development is uncertain and must be used with caution.

(5) McDaniel has determined that the chance of discovery is estimated to be between 18% and 51% and the chance of development between 50 and 70%, based on an evaluation of the risks relevant to the blocks.

(6) Sub-Total and Total are based on the probabilistic aggregation of zones within a prospect and arithmetic aggregation of the individual prospects to the Sub-Total and Total level.

• (7) Volumes listed are full life volumes, prior to any cut-offs due to economics.

• (8) Based on a Mcf to BOE conversion of 6 to 1.

Exploration Update

The current high-graded prospect identified in the northern region of the Corentyne Block, Kawa, has been named after the iconic Kawa Mountain which overlooks the village of Paramakatoi in the Pakaraima Mountains of Guyana. The primary target is a Santonian aged, stratigraphic trap, interpreted to be analogous to the discoveries immediately to the east on Block 58 in Suriname. The Kawa prospect has been matured to a drill-ready status and well design is complete. Additional prospects and leads on the northern portion of Corentyne have been identified and are being matured by the Company.

The Company has identified an Aptian stratigraphic prospect on the Demerara Block, named Makarapan, for the Precambrian mountain overlooking the Rupununi Savannahs, and the prospect is in the process of being matured to drill-ready status. Additional prospects and leads on the Demerara Block are being matured by the Company.

Basin wide studies which include hydrocarbon generation and migration analysis, and biostratigraphic studies are underway and will be incorporated into the exploration efforts to further refine the projects and reduce exploration risk.

Prospect Map

The map below shows the location of the Joint Venture's Demerara and Corentyne Blocks in the Guyana-Suriname Basin, along with peer discoveries.(1)

(1) Block acreage reflects the proposed 25% relinquishment that has been submitted to the Government of Guyana in connection with moving to the second renewal period of the Corentyne and Demerara PPLs. Final relinquishment details remain subject to government approval.

Demerara and Berbice Work Commitments

The Company completed negotiations with the Government of Guyana on work commitments with respect to its PPL for the Demerara block in offshore Guyana. The Joint Venture has been advised that the existing February 12, 2021 deadline for drilling the next well will be extended to February 11, 2022 subject to documentation.

The Company has also been advised that the Berbice PPL workplan will be modified from completing a seismic program and all associated processing and interpretation by August 12, 2021 to completing a seismic program and all associated processing and interpretation so as to inform and lead to the drilling of at least one Exploration well by June 15, 2022, subject to documentation. The Berbice PPL is held by ON Energy Inc. CGX Energy has a 62% ownership interest in ON Energy Inc.

About CGX Energy

CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin.

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Forward-Looking Statements:

This news release contains certain statements or disclosures relating to the Company that are based on the expectations of its management as well as assumptions made by and information currently available to the Company which may constitute forward-looking statements or information ("forward-looking statements") under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that the Company anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking statements. In some cases, forward-looking statements can be identified by the use of the words "expect", "prospect", "will" and other similar words suggesting future outcomes or statements regarding an outlook.

In particular, but without limiting the foregoing, this news release contains forward-looking statements pertaining to the following: the Company's exploration and development activities; expenditures; infrastructure projects; the Company's drilling prospects; and governmental and regulatory approvals and agreements. In addition, statements relating 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 exist in the quantities predicted or estimated and can be profitably produced in the future.

The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of the Company including, without limitation: prevailing and future commodity prices and currency exchange rates; applicable royalty rates and tax laws; interest rates; future well production rates and reserve volumes; operating costs, the timing of receipt of regulatory approvals; success obtained in exploration, development and production activities; anticipated timing and results of capital expenditures; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the global, Guyanese, Surinamese and other economies; the state of the oil and natural gas exploration and production industry; the availability and cost of financing, labour and services; and ability to market crude oil and natural gas. In particular, except where otherwise stated, the Company has assumed a continuation of existing business operations on substantially the same basis as exists at the time of this news release.

The Company believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.