CGX Energy completes US$35 million loan agreement

TorontoCGX Energy Inc. (TSXV: OYL) (“CGX” or the “Company”) today announced that following its press release dated March 10, 2022the Company has closed the previously announced financing agreement for a WE $35 million loan (the “Loan”) with Frontera Energy Corporation (“Frontera”) which will allow CGX to continue to fund a portion of its share of the costs related to the Corentyne block, the Berbice deepwater port and other budgeted costs, as agreed with Frontera.

Under the terms of the loan, as amended, the loan to CGX may be drawn down in tranches on a non-revolving basis until the earliest of the following: September 10, 2023 or the date on which CGX drew the maximum amount of the Loan. The loan, together with all accrued interest, will be due and payable September 10, 2023, or such later date as determined by Frontera in its sole discretion. Interest payable on the principal amount outstanding will accrue at a rate of 9.7% per annum payable monthly in cash, together with interest on default interest. If the loan is granted by Frontera beyond September 10, 2023, at its sole discretion, the new interest rate will be 15% per annum. The loan will be secured by all assets of CGX. A standby fee of 2% per annum multiplied by the daily average amount of unused loan commitment greater than WE $19 million will be payable quarterly in arrears by CGX on the last business day of each fiscal quarter during the Draw Period.

Subject to final approval by the TSX Venture ExchangeFrontera in its sole discretion, at any time after July 31, 2022 up to and including September 10, 2023may elect to convert all or part of the principal amount of the loan into common shares of CGX at a conversion price equal to WE $2.42 per ordinary share (being the WE the dollar equivalent of Cdn. $3.10 per common share), provided that Frontera provides CGX with 15 business days notice of such conversion.

CGX has the right to prepay all or part of the Loan, including any unpaid interest, upon 15 business days notice to Frontera prior to September 10, 2023. CGX is also required to repay the entire outstanding loan in the event that, without Frontera’s consent, it issues a security that would dilute Frontera’s current ownership in CGX, or one of its subsidiaries enters into a transaction the proceeds of which is used by CGX to pay its share of the authorized costs of Wei-1.

The maximum number of common shares of CGX that may be acquired by Frontera upon conversion of the principal amount of the loan is 14,462,809 million common shares of CGX. If the loan principal is fully converted, Frontera will own approximately 77.93% of the currently issued and outstanding common shares of CGX (compared to its current ownership of 76.97%).

The loan remains subject to customary conditions, including receipt of all required final regulatory approvals.

About CGX

CGX is a Canada-based oil and gas exploration company focused on exploring for petroleum in the Guyana-Suriname Basin and the development of a deep water port in Berbice, Guyana.

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 or anticipates will or may occur in the future (including, without limitation, statements regarding the Guyana exploration program). All information other than historical facts is forward-looking information. Forward-looking information reflects CGX’s current expectations, assumptions and beliefs based on information currently available to it and takes into account its experience and perception of historical trends. Although CGX believes that the assumptions inherent in 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 of which are similar to those of other oil and gas companies and some of which are unique to CGX. Actual results may differ materially from those expressed or implied by the forward-looking information, and even if such actual results are achieved or substantially achieved, there can be no assurance that they will have the anticipated consequences or effects on CGX. Documents filed by CGX from time to time with securities regulatory authorities (including Annual Information Forms for fiscal 2021) describe 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 modification by referring to CGX’s respective profiles on SEDAR at www.sedar.com. All forward-looking information speaks only as of the date on which it is made and, except as required by applicable securities laws, CGX disclaims any intention or obligation to update any forward-looking information, whether as a result of future or other new information, events or results.

Contact:

Poon Hill-York

Tel: (832) 300-3200

Leslie M. Gill