2014 Press Releases
November 21, 2014
TSX-V: CWV: Crown Point Energy Inc. (“Crown Point” or the “Company”) today provided an update on its 14-well development, exploration and recompletion program at its Tierra del Fuego (“TDF”) concessions in Argentina, in which Crown Point has a 25.78% working interest.
“The latest update provides further evidence that we are able to increase TDF production as our drilling program brings new volumes on stream,” said Murray McCartney, CEO of Crown Point. “We intend to report results from more of our wells in the next few weeks.”
The 14-well program is focused on the Las Violetas concession, one of Crown Point’s three TDF concessions. The program consists of drilling eight new development wells and the fracking and recompletion of four existing wells in the Los Flamencos gas pool, plus two exploration wells, one near the San Luis gas plant and one on the Puesto Quince prospect. Crown Point’s priority is to have as many of the newly drilled wells and the recompleted wells as possible tied in and on production during the fourth quarter of 2014.
Details on development well LFE-1002
As noted in a prior press release, LFE-1002 flowed gas from the Springhill sand formation during an eight hour production test at an average gross rate of 3.0 million cubic feet (“mmcf”) of gas per day and flowed liquids at an average gross rate of 213 barrels per day of oil (44 API) and 67 barrels per day of treatment fluid. Total gross production during the eight-hour test was 0.9 mmcf of gas and 95 barrels of liquids comprised of 75% oil and 25% treatment fluid at an average flowing pressure of 327 psi. Crown Point cautions that test results are not necessarily indicative of long-term performance of the well or of ultimate recovery of hydrocarbons.
Necessary government approvals to lay a gas line from the well head to field facilities have been issued and field work has commenced to place the well on production.
LFE-1002 was drilled to a final total depth of 2,280 metres, logged and cased with a 10 metre gross Springhill sand section. The well was completed and fracked with 92 tonnes of sand.
Details on development well LF-1027
As noted in a prior press release, LF-1027 was drilled to a final total depth of 2,242 metres, logged and cased with a 16 metre gross Springhill sand formation, and subsequently completed and fracked with 90 tonnes of sand. The well was tied into field facilities on November 15 and production tested for ten hours through a separator on November 16. During the production test it flowed gas and liquids at an average gross rate of 2.77 mmcf of gas per day and an average gross rate of 55 barrels per day of oil (41 API) and 18 barrels per day of treatment fluid respectively. Total gross production during the ten-hour test was 1.16 mmcf of gas and 30.5 barrels of liquids comprised of 23 barrels of oil and 7.5 barrels of treatment fluid at an average flowing pressure of 182 psi. LF-1027 is now on production.
Update on exploration program
SL x-1003, the first of two exploration wells, was drilled to a depth of 2,207 metres and cased on
November 11 as a potential Springhill gas well. Completion and testing equipment has arrived at the well site and completion operations commenced on November 19. The well is located approximately 2.6 km from the San Luis Gas Plant and was drilled to evaluate the potential of the Springhill sandstones on a separate fault block adjacent to the San Luis Springhill gas pool.
The drill rig has moved to the second exploration well site, PQx -1001, to evaluate the Springhill formation in the Puesto Quince Prospect. Drilling operations are scheduled to begin this weekend.
Realized Benefits Expected in the Fourth Quarter
Crown Point expects a positive impact on its TDF operating results starting in the fourth quarter of 2014 from the new production from this 14-well program, especially when combined with the effects of improving natural gas prices so far in the quarter compared with the fourth quarter of 2013.
As disclosed in October, two other wells have recently been placed on production: LF-1024, a development well, and LFa-1003, a newly recompleted well that had previously been suspended in 2012 due to low flow rates.
- LF-1024 was drilled to a total depth of 2,200 metres. This well was logged and cased with a 13.5 metre gross Springhill sand section and has been completed and fracked with 93 tonnes of sand. The well was tied in on October 7, 2014. A production control on November 8 recorded a gross average flow rate of 3.0 mmcf of gas per day and 30 barrels of oil per day at a flowing well head pressure of 754 psi.
- LFa-1003 has a 6.5 metre perforated Springhill sand section and was recompleted and fracked with 52 tonnes of sand. The well was placed back on production on October 1, 2014 at an average gross rate of 0.6 mmcf of gas per day. A production control conducted on November 15 indicated that the well is producing at an average gross rate of 1.1 mmcf of gas per day and 10 barrels of oil per day at a flowing well head pressure of 169 psi.
- Of the other three recompletions, all have been fracked and one (LF-1013) is waiting on post frack clean out operations which Crown Point expects to be completed prior to year-end. Of the two wells that have been cleaned out,
- LFE.x-1 has a 16.5 metre perforated Springhill sand section and was recompleted and fracked with 57 tonnes of sand. The well was placed on production on October 27. The latest production control carried out on November 8 recorded a gross average flow rate of 0.3 mmcf of gas per day at a flowing well head pressure of 128 psi.
- Laz.x-2 has a 6.5 metre perforated Springhill sand section and was recompleted and fracked with 93 tonnes of sand. The well has been swabbed and flowed gas intermittently at low pressure rates. The well is suspended and under review.
Of the other two development wells drilled to date, one (LF-1008) awaits testing after having been cased, completed and fracked as a potential Springhill gas well, and one (LF-1028) was cased as a potential Springhill gas well but due to borehole conditions could not be successfully cemented. This well remains suspended and may be re-entered at a later date for remedial work. Three other development wells remain to be drilled during the fourth quarter and early 2015.
The Company believes market conditions will continue to have a positive impact on oil and natural gas prices as there is not sufficient hydrocarbon production in Argentina to meet the demand for energy consumption in the country. The Company also expects to realize benefits from its approved participation in the New Gas Subsidy Program. This new hydrocarbon subsidy program provides an incentive for producers to effectively earn higher gas prices for increases in natural gas production above base production levels.
For inquiries please contact:
President & CEO
Ph: (403) 232-1150
Crown Point Energy Inc.
Arthur J.G. Madden
Vice-President & CFO
Ph: (403) 232-1150
Crown Point Energy Inc.
Brian J. Moss
Executive Vice-President & COO
Ph: (403) 232-1150
Crown Point Energy Inc.
About Crown PointWebsite: www.crownpointenergy.com
Crown Point Energy Inc. is an international oil and gas exploration and development company headquartered in Calgary, Canada, incorporated in Alberta, Canada, trading on the TSX Venture Exchange and operating in South America. Crown Point’s exploration and development activities are focused in the Austral and Neuquén 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.
Forward looking information: Certain information set forth in this document, including: the statement that the agreement with the Investors will strengthen Crown Point’s balance sheet with significant new capital and will reinforce Crown Point’s board of directors with two representatives of the Investors joining as directors; the statement that the funds from the Investment will allow Crown Point to advance the exploration and development of its concessions in Argentina and that the new directors will provide Crown Point with a strategic advantage due to their vast experience in the energy and banking industries in Argentina and that the transitions contemplated by the Investment represent a long term relationship geared to growing the Company into a significant player in the Argentine oil and gas sector; the identity of the expected nominees of the Investors to the Board; matters with respect to describing the Initial Closing and the Second Closing, including the dollar amounts and currencies of payment; the statement that the Board intends to call and hold a special meeting of the Company’s shareholders to consider the Second Closing in due course; statements with respect to the composition of the Board and the belief that the Board will continue to be comprised of a majority of directors who are independent of management and the Investors; that an information circular describing the Second Closing and the Investors will be prepared and mailed to the Company’s shareholders for this purpose; the intended use of proceeds of the Investment; closing matters, including certain conditions to closing as described herein; and the statement that the Investors have agreed not to sell or otherwise transfer any Shares owned by them for a period of two years following closing (subject to certain conditions) are considered forward-looking information, and necessarily involve risks and uncertainties, certain of which are beyond our control. Such risks include but are not limited to: failure to realize the anticipated benefits of the Investment, as described herein; failure to complete the Initial Closing and/or the Second Closing; the risk that the directors expected to be nominated by the Investors, as described herein, will change; regulatory risks including TSXV approval for the Investment and the related matters; failure to secure the requisite shareholder approval for the Second Closing; failure to complete the closings (as applicable) on the timelines the Company as planned; the risk that the Investment (or any part thereof) will not be completed at all if these approvals are not obtained or some other condition to the applicable closing is not satisfied; the risk that a meeting to approve the Second Closing (including the mailing of the related information circular) will be delayed or frustrated. Actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that we will derive therefrom. With respect to forward-looking information contained herein, Crown Point has made assumptions regarding, among other things: the receipt of all regulatory (including TSXV) and shareholder approvals; that the director nominees of the Investors will not change; that the Company will be able to realize certain benefits from the Investment and related matters; that the Company will be able to hold a shareholder meeting to approve the Second Closing in due course; that the Investment will be completed in accordance with the terms set forth in the Agreement; the impact of increasing competition; the general stability of the economic and political environment in which the Company operates; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the costs of obtaining equipment and personnel to complete the Company’s capital expenditure program; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration activities; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, commodity price controls, import/export matters, taxes and environmental matters in Argentina; and the ability of the Company to successfully market its oil and natural gas products. Additional information on these and other factors that could affect us are included in reports on file with Canadian securities regulatory authorities, including under the heading “Risk Factors” in our annual information form, and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this document are made as of the date of this document, and we do not undertake any obligation to update publicly or to revise any of the forward looking statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities law.
Initial Production Rates: Any references in this news release to production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Additionally, such rates may also include recovered “load oil” fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company. Initial production rates may be estimated based on other third party estimates or limited data available at this time. Well-flow test result data should be considered to be preliminary until a pressure transient analysis and/or well-test interpretation has been carried out. In all cases in this news release initial production results are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.
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.