Drilling on various conventional plays is expected to commence in late 2013, following interpretation of the seismic programs. Information obtained from these wells will assist Crown Point in determining the economic viability of the Vaca Muerta shale play on the Cerro de Los Leones concession. A second 3D seismic program is planned for the eastern portion of the concession targeting both structural plays and stratigraphic resource type plays. This program may be shot in 2014 and would be followed up with the drilling of one to two wells targeting the above mentioned plays.
Following the initial drilling phase, Crown Point may consider additional exploration and development drilling in the area, including the possibility of drilling vertical and horizontal tests in the Vaca Muerta shale play.
EL VALLE, SAN JORGE BASIN, ARGENTINA
Crown Point has identified additional drilling locations in this pool and is in the early conceptual planning stage of a waterflood secondary recovery scheme to increase reservoir pressure and the ultimate reserve recovery of the pool. 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.
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") 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. "BOEPD" means barrels of oil equivalent per day. "MMBtu" means million British thermal units. "Mcf" means thousand cubic feet. "2D" means two dimensional. "3D" means three dimensional.
Non-IFRS Measures: This press release discloses "funds flow from operations" and "operating netbacks", which do not have standardized meanings under International Financial Reporting Standards ("IFRS") and as such may not be comparable with the calculation of similar measures used by other entities. Funds flow from operations should not be considered an alternative to or more meaningful than, cash flow from operating activities as determined in accordance with IFRS as an indicator of the Company's performance. Management uses funds flow from operations to analyze operating performance and considers funds flow from operations to be a key measure as it demonstrates the Company's ability to generate cash necessary to fund future capital investment. A reconciliation of funds flow from operations to cash flow from operating activities is presented in the MD&A. Operating netbacks are calculated on a per unit basis as oil, natural gas and natural gas liquids revenues less royalties, transportation and operating costs. Management believes this measure is a useful supplemental measures of the Company's profitability relative to commodity prices.
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