Crown Point Energy Inc. (“Crown Point” or the “Company”) (TSX-V: CWV) today provided an operational update regarding the results of its ongoing development, exploration and recompletion program at its 25.78%-owned Tierra del Fuego (“TDF”) Las Violetas concession in Argentina.
Crown Point also provided updates on other TDF operations, including the recent commencement of an additional three well drilling program on the Las Violetas concession; plans to acquire additional 3-D seismic on the Las Violetas, Rio Cullen and Angostura concessions; and plans to commence a fracture stimulation program targeting select wells drilled during the 2014 and early-2015 exploration and development drilling program.
Los Flamencos Development Drilling – Eight Well Program
As noted in prior disclosures, four (LF-1008, LF-1027, LF-1024 and LFE-1002) of the first five development wells drilled on the Los Flamencos gas pool (located in the Las Violetas concession), were placed on production during the fourth quarter of 2014.
The fifth development well, LF-1028, was cased as a potential Springhill formation gas well but suffered mechanical problems while running casing. Remedial work will be required to evaluate the Springhill interval and is planned for the second quarter of 2015, after which it is anticipated that the well will be completed and tested.
LFE-1003, the sixth development well, was spud on December 15, 2014, drilled to a total depth of 2,139 metres and cased on December 30, 2014 as a potential Springhill formation gas well with approximately seven metres of potential gross gas pay. Completion operations commenced on January 5, 2015 and were finalized one week later. The Springhill interval tested dry. Fracture stimulation will be required to obtain definitive flow rate information and is planned for the second quarter of 2015. LFE-1003 is located on the eastern extension of the Los Flamencos gas pool.
LF-1029, the seventh development well, was spud on January 6, 2015, drilled to a total depth of 2,237 metres and cased on January 24, 2015 as a potential Springhill formation gas well with approximately 13 metres of potential gross gas pay. While drilling below the Springhill, the well encountered approximately 14 metres of potential gross gas pay in two separate fractured intervals within the Tobifera formation. Completion operations are due to commence shortly with results expected in the second quarter of 2015. LF-1029 is located in the main body of the Los Flamencos gas field.
LFE-1004, the final development well in the eight development well program, was spud on February 8, 2015, drilled to a total depth of 2,253 metres and cased as a potential gas well with between approximately four to 14 metres of potential gross gas pay in the basal Pampa Rincon formation and approximately 31 metres of potential gross gas pay in the Tobifera formation. Subsequent log and sample analysis indicated that both gas-bearing intervals are highly fractured. It is anticipated that the well will be completed and production tested in the second quarter of 2015. The Springhill formation was not encountered in this well, likely due to localized minor faulting at this location. LFE-1004 was drilled on the eastern extension of the Los Flamencos gas field.
TDF Exploration Drilling – Two Well Program
As previously disclosed, the first of the two TDF exploration wells, SL x-1003, was tied in to the Company-owned San Luis gas plant and placed on production on December 30, 2014. The second exploration well, PQ x-1001, was drilled to a total depth of 1,939 metres and cased on December 8, 2014 with approximately 14 metres of potential gross oil and gas pay in the Springhill sandstones formation. PQ x-1001 was drilled to evaluate the Springhill formation over the 50 square kilometre 3-D seismic mapped Puesto Quince structure.
Subsequent testing in late December 2014, together with log and sample analysis, indicates that PQ x-1001 is a new pool discovery, however, fracture stimulation, planned for the second quarter of 2015, will be required to obtain definitive flow rate information. Both exploration wells are located on the Las Violetas concession.
TDF Recompletions – Four Well Program
As previously disclosed, the first two recompleted wells were placed on production in October 2014 after fracture stimulation. Fracture stimulations on the third and fourth wells, both suspended after encountering tight Springhill Formation sands, were unsuccessful.
Additional Las Violetas Drilling – Three Well Program
Crown Point has commenced a program to drill three additional wells on its Las Violetas concession. The first of these wells, LFE-1001, is located on the eastern flank of the Los Flamencos gas field and is targeted to exploit the Springhill formation at an approximate depth of 2,100 metres. This well was spud on March 9, 2015.
The second well, designated LV-112, is a step out location on the Las Violetas gas pool which is situated to the north of the Puesto Quince structure. The pool produces from the Springhill formation and it has been estimated that as of January 1, 2014 the pool had recovered approximately nine billion cubic feet (Bcf) of gas with some liquids since going on stream in 1998. The new well will be located on the previously undrilled northern extension of the structure, approximately one kilometre from the nearest producing well. Gas from Las Violetas is piped to the Rio Chico gas treatment plant located approximately 25 kilometres to the south. This Company-owned gathering system has sufficient capacity to transport additional production from the new well. The target depth of the Springhill at LV-112 is approximately 1,900 metres. The well is scheduled to be drilled in the second quarter of 2015 after drilling operations are completed at LFE-1001.
The third well in the drilling program, SL x-1004, is a one kilometre northern offset to SL x-1003. This location is scheduled to be drilled after operations are completed at LV-112.
TDF 3-D Seismic – Three Acquisition Programs
The Company plans to acquire extensive 3-D seismic in TDF beginning in the second quarter of 2015. The first program comprises approximately 50 square kilometres, located on the Rio Cullen concession in northern TDF. The second program, comprising approximately 52 square kilometres, will be recorded on the Angostura concession which is located between the Rio Cullen and Las Violetas concession to the south. Both programs are designed to map and evaluate the Springhill formation which is productive for both oil and gas in the area.
The third seismic program, comprising approximately 120 square kilometres, will evaluate the eastern extension of the Los Flamencos gas pool (located in the Las Violetas concession). The program will extend 3-D coverage on this pool to the east and south of current seismic mapping and recent drilling locations.
The Company intends to use the new seismic to identify exploration locations on the Rio Cullen and Angostura concessions where at least one well is planned on each concession in the fourth quarter of 2015. The seismic survey at Los Flamencos is intended to identify additional step out locations on the eastern extension of this pool for drilling later in 2015 and 2016.
TDF Fracture Stimulation Program
The TDF fracture stimulation program is expected to commenced in the second quarter of 2015 and will include LFE-1003, PQ x-1001 and, if necessary, LF-1029, LFE-1004, LF-1028 and LFE-1001.
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About Crown Point
Crown Point Energy Inc. is an international oil and gas exploration and development company operating in South America, with assets in Argentina’s Austral and Neuquén basins. Crown Point is establishing a portfolio of producing properties and pursuing exploration and production enhancement opportunities to provide a basis for future growth. Crown Point is headquartered in Calgary, Canada and its common shares are publicly traded on the TSX Venture Exchange under the symbol “CWV”.
Certain information set forth in this news release, including: that remedial work will be required on LF-1028 to evaluate the Springhill interval and is planned for the second quarter 2015, after which the well will be completed and tested; that fracture stimulation will be required on LFE-1003 to obtain definitive flow rate information and is planned for the second quarter 2015; that completion operations are due to commence shortly on LF-1029 with results expected in the second quarter of 2015; that LFE-1004 will be completed and production tested in the second quarter of 2015; that fracture stimulation, planned for the second quarter 2015, will be required to obtain definitive flow rate information for PQ x-1001; that LV-112 is scheduled to be drilled in the second quarter of 2015 after drilling operations are completed at LFE-1001; that SL x-1004 will be drilled after operations are completed at LV-112; that the Company plans to acquire extensive 3-D seismic in TDF beginning in the second quarter of 2015 and the Company’s expectations with respect to the scope and intentions with respect of such seismic program; that the seismic data from the Company’s planned seismic program will be used to identify exploration locations on the Rio Cullen and Angostura concessions where at least one well is planned on each concession in the fourth quarter of 2015 and that the seismic survey at Los Flamencos will identify additional step out locations on the eastern extension of this pool for drilling later in 2015 and 2016; and that the TDF fracture stimulation program is expected to commence in the second quarter of 2015 and will include LFE-1003, PQ x-1001 and, if necessary, LF-1029, LFE-1004, LF-1028 and LFE-1001, is 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: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; risks associated with operating in Argentina, including risks of changing government regulations (including the adoption of, amendments to, or the cancellation of government incentive programs or other laws and regulations relating to commodity prices, taxation, currency controls and export restrictions, in each case that may adversely impact us), expropriation/nationalization of assets, price controls on commodity prices, inability to enforce contracts in certain circumstances, the potential for a sovereign debt default or a hyperinflationary economic environment, and other economic and political risks; risks that third party operators will not operate in projects where we have an interest in a safe, efficient and effective manner; risks that third parties will not satisfy their contractual obligations; loss of markets and other economic and industry conditions; volatility of commodity prices; currency fluctuations; imprecision of reserve estimates; environmental risks; competition from other producers; inability to retain drilling services; delays resulting from or inability to obtain required regulatory approvals; the lack of availability of qualified personnel or management; stock market volatility and ability to access sufficient capital from internal and external sources; and economic or industry condition changes. 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, we have made assumptions regarding: the impact of increasing competition; the general stability of the economic and political environment in Argentina; the timely receipt of any required regulatory approvals; the Company’s ability to fund its operations and activities described herein; the Company’s ability 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 our capital expenditure program; the ability of the operator of the projects in which we have an interest to operate the field in a safe, efficient and effective manner; our ability to obtain financing on acceptable terms when and if needed; 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 our ability 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 our ability to successfully market our 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 news release are made as of the date of this news release, 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.
Certain information contained herein is considered “analogous information” as defined NI 51-101. In particular, this news release presents certain estimates with respect to cumulative recovered natural gas and natural gas liquids volumes from the Las Violetas gas pool from 1998 to January 1, 2014. Such information was derived from the Company’s reserve report for the year ended December 31, 2013 and dated March 7, 2014, as prepared by McDaniel & Associates Consultants Ltd., independent qualified reserves evaluators, in accordance with NI 51-101 and the Canadian Oil and Gas Evaluation Handbook. Such information has been presented to show the presence of oil and gas resources in Crown Point’s areas of interest (or areas close to Crown Point’s areas of interest) and to demonstrate the basis for Crown Point’s business plan and strategies. Such information should not be construed as an estimate of future reserves or resources or future production levels.
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.