The two year capital commitment for the Las Violetas Exploitation Concession, including the extension fee, development and exploration commitments, is US$21.23 million (gross) (net - US$5.47mm).
Rio Cullen and Angostura Exploitation Concessions
-- Exploration commitment - Rio Cullen: US$3.3 million (gross) (net US$0.85 million), Angostura: US$3.8 million (gross) (net US$0.98 million) which in both cases includes seismic and drilling and is to be expended over a 24 month period.-- Base royalty: increase from 12 to 15%;-- Variable royalty: 0.5% to 2.5% (in 0.5% increments) with increasing oil and gas prices; and-- After fulfillment of the exploration commitments there is an additional minimum total additional investment commitment on each concession: US$1.8 million (gross) (net US$0.46 million).
The combined two year capital commitment for both the Rio Cullen and Angostura Exploitation Concessions is US$7.1 million (gross) (net - US$1.83mm).
Cerro de Los Leones, Province of Mendoza, Neuquen Basin
The seismic interpretation and geological integration continues at the 100% interest Cerro de Los Leones Exploration Concession focusing on two separate potentially multi-zone structural features. These structural features have been identified on the recently acquired 3-D seismic program. The structural features comprise the northern extension of a larger structural trend of producing fields located immediately to the south of Crown Point's concession, which producing fields include the YPF field Pampa Palauco. The Argentina Secretary of Energy records show that Pampa Palauco has to date produced 21.4 million barrels of oil. Engineering well design and reservoir evaluation is underway for these two prospects. A drilling rig of suitable capacity to drill and evaluate these two structures is expected to be available at year end. These drilling of these structures would evaluate both the conventional reservoirs as well as the unconventional Vaca Muerta oil shales.
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: the intent of Crown Point and its partners to import a drilling rig into Tierra del Fuego to conduct a multi-well and multi-year drilling program; the expectation that drilling operations in the Las Violetas Exploitation Concession will commence in the fourth quarter of 2013 and the number of wells to be drilled; the expectation that the multi-well Las Violetas Exploitation Concession drill program will target predominantly gas charged Springhill sandstones; the expectation of how capital expenditures will be funded; the expectation that drilling on the Las Violetas Exploitation Concession represents a low risk development program; the expected time to drill, case, tie-in and complete the wells to be drilled; the expectation that successful drilling on certain high reward exploration and exploitation locations on the Las Violetas Exploitation Concession could add additional drilling locations; the expectation that production increases resulting from the drilling program will be eligible for the New Gas Program; and the timing of the availability of a drilling rig for evaluating certain prospects on the Cerro de Los Leones Exploration Concession. These forward-looking statements are based on numerous assumptions including but not limited to the following: the Company being eligible for the New Gas Program and the terms thereof, 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.