The producing zones in the EV33, EV34 and EV36 wells demonstrate a good correlation to the EV23, EV26 and EV31 wells drilled in 2011. Stratigraphic correlation and production performance of these wells all point to a single oil pool of significant size. The new wells encountered a slightly pressure depleted reservoir indicative of connectivity with the prior year's wells. The larger pool size is supported by geological and seismic mapping and the lack of a defined water contact in the reservoir.
Crown Point has identified additional drilling locations in this pool and is in the early conceptual planning stage of implementing a waterflood secondary recovery scheme. Waterflood secondary recovery schemes are used throughout the San Jorge Basin and consistently demonstrate improved rates of production and higher ultimate recoveries of oil in place from equivalent reservoirs.
CURRENT EL VALLE PRODUCTION
Sales volumes for the year ended August 31, 2012 averaged 358 barrels of oil per day compared to 202 barrels of oil per day for the year ended August 31, 2011.
The Company has a 100% working interest in approximately 6,325 acres in the Canadon Ramirez area of the Golfo San Jorge Basin. The Company plans to commence the drilling of two oil exploitation wells on the Canadon Ramirez Concession in 2014. The proposed wells are to be drilled on a 3D seismically defined western extension of the Mata Magallanes Oeste field. The Canadon Ramirez Concession has access to existing infrastructure in the adjacent Mata Magallenes Field.
LAGUNA DE PIEDRA
The Company holds a 100% interest and operatorship of the approximate 246,354 acre exploration concession.
Crown Point plans to drill one exploration well on the Laguna de Piedra Concession. The primary targets are 3D seismically defined light oil objectives in the Punta Rosada and Quintuco sandstones. Environmental approval from the Province of Rio Negro will be required before drilling operations will begin. Discussions with the local municipal governments and Provincial Environmental departments are ongoing.
About Crown Point
Crown Point Energy Inc. is an international oil and gas exploration and development company headquartered in Calgary, Canada, incorporated in Canada, trading on the TSX Venture Exchange and operating in South America. Crown Point's exploration and development activities are focused in the Golfo San Jorge, Neuquen and Austral basins in Argentina. Crown Point has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a basis for future growth.
Certain Oil and Gas Disclosures: Barrels of oil equivalent (boe's) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (6 mcf) to one barrel (1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of crude oil in Argentina as compared to the current price of natural gas in Argentina is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. "MMbtu" means million British thermal units. "Mcf" means thousand cubic feet.
Non-GAAP Measures: This press release discloses "operating netbacks" (calculated on a per unit basis as oil, natural gas and natural gas liquids revenues less royalties, transportation and operating costs), which is a non-IFRS measure. Management believes this measure is a useful supplemental measure of the Company's profitability relative to commodity prices. Readers are cautioned, however, that this measure should not be construed as an alternative to other terms such as net income as determined in accordance with IFRS as a measure of performance. Crown Point's method of calculating this measure may differ from other companies, and accordingly, may not be comparable to similar measures used by other companies.
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