CALGARY, ALBERTA -- (Marketwire) -- 03/06/13 -- Crown Point Energy Inc. (TSX VENTURE: CWV) ("Crown Point" or "the Company") is pleased to provide the following operational update:
Crown Point's net daily production during January and February of 2013 has averaged 1,840 boe/d comprised of 1,590 boe/d from Tierra del Fuego and 250 bbls/d of oil from El Valle. El Valle production has been negatively impacted by the failure of a down hole pump in one of the newly drilled wells.
CERRO DE LOS LEONES CONCESSION - Neuquen Basin, Mendoza
Crown Point's Cerro de los Leones 160 km2-3D and 122 km-2D seismic program field data acquisition in the southern section of the concession was completed in December 2012. Management expects seismic processing and interpretation will be completed by the end of April with drilling location selection and an application for a drilling license to follow.
LAS VIOLETAS, ANGOSTURA SUR, RIO CULLEN CONCESSIONS, Austral Basin, Tierra del Fuego
The bulk of Crown Point's production and reserves are located on the Las Violetas Concession, Tierra del Fuego. Crown Point's net daily production at Tierra del Fuego for January and February has averaged 1,590 boe/d which is comprised of 7.63 mmcf/d of gas and 325 bbls/d of oil and liquids.
The ten year extension agreements (extending the termination date of the three concessions to 2026) negotiated in late 2012 with the provincial government of Tierra del Fuego, have been signed by the Governor and are waiting for ratification by the Provincial Legislature during the current parliamentary session. After ratification, a multi-well drilling program, focussing on increasing Gas Plus Production is planned to commence on the Los Violetas concession. The Company also plans to acquire 3-D seismic on the Angostura Sur and Rio Cullen concessions during 2013. Crown Point's Tierra del Fuego concessions are high quality natural gas weighted assets that Crown Point believes possess the capability to deliver increased levels of production and reserves in an increasing natural gas price market.
In 2012 a successful five well fracture stimulation program was conducted and has proved to be very effective resulting in low overall field declines. These fracture stimulations were primarily focused in the designated Gas Plus area which yields a gas plus sales price of $4.10/mcf. Recently the government of Argentina announced a new gas price of $7.50/mcf for "New Gas" to be obtained under a federal government administered program. The Company intends to apply for this higher price and is required to submit an application for the new gas program prior to the end of June 2013.
EL VALLE Concession, San Jorge Basin, Santa Cruz
Last year Crown Point completed a six well drilling program at El Valle, resulting in five new oil wells and one suspended well. Close proximity to electricity has allowed two of the new wells to utilize a new type of progressive cavity pump (HRPCP Progressive Cavity pump) which has technology that enables it to handle high GOR (gas/oil ratio) oil more efficiently.
Operationally, recent production at El Valle has been negatively impacted by the failure of a PCP bottom hole pump in the EV 28 well due to a buildup of wax in the well-bore. The pump has been replaced following a fracture stimulation of the producing zones and the well has been placed back on production. Work over operations, comprising a well bore clean out and a fracture stimulation, have been completed on a second well, EV 24. The production performance of this well has also been negatively impacted by the accumulation of significant amounts of wax in the well bore.
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 information regarding Crown Point set forth in this document may constitute forward-looking statements under applicable securities laws and necessarily involve substantial known and unknown risks and uncertainties, including information relating to the following: Crown Point's exploration and development plans on its Cerro de los Leones concession, including the timing for processing and interpreting data obtained therefrom and the activities that will follow; Crown Point's exploration and development plans on its Los Violetas, Angostura Sur and Rio Cullen concessions, including the timing for obtaining approvals of the extension agreements for the concessions, the timing for commencing a drilling program on the Los Violetas concession and the details thereof, the intention to conduct a 3D seismic program on the Angostura Sur and Rio Cullen concessions and the timing thereof, the ability of these concessions to deliver increased levels of production and reserves in an increasing natural gas price market, and Crown Point's intention to apply for the "new gas" program to benefit from higher gas prices offered thereby. These forward-looking statements are based on numerous assumptions including but not limited to the following: drilling success, expectations with respect to future production levels, future capital expenditure levels, expectations of cash flow from operating activities, commodity prices, costs associated with capital expenditures, the availability of personnel and equipment when expected, the timely receipt of applicable regulatory and other governmental approvals, and the continuance of existing laws and regulations. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect.
These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Crown Point's control, including without limitation, risks associated with the following: oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, environmental risks, inability to obtain drilling rigs or other services, capital expenditure cost increases, including drilling, completion and facility costs, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals, ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, Argentina, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations and changes to tax laws) and changes in how they are interpreted and enforced, political risks (including the risk of the expropriation of the Company's assets), increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, and stock market volatility. Readers are cautioned that the foregoing list of factors is not exhaustive. Crown Point's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional information on these and other factors that could affect Crown Point's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com ) or Crown Point's website (www.crownpointventures.ca ). The forward-looking statements contained in this document are made as at the date of this news release and Crown Point does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Oil and Gas Disclosures
"boe/d" means barrels of oil equivalent per day. "bbls/d" means barrels per day. "mmcf/d" means million cubic feet per day. "mcf" means thousand cubic feet.
Barrels of oil equivalent (boes) 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.
Neither 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 news release.
Crown Point Energy Inc.
Murray D. McCartney
President & CEO
Crown Point Energy Inc.
Arthur J.G. Madden
Vice-President & CFO
Crown Point Energy Inc.
Brian J. Moss
Executive Vice-President & COO
(403) 232-1158 (FAX)
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