TSX-V: CWV: Crown Point Energy Inc. (“Crown Point”, the “Company” or “we“) today provided an update of its exploration drilling program in Tierra del Fuego.
As previously reported, the Company and its partners drilled and cased one exploratory well on each of its Rio Cullen and Angostura concessions in Tierra del Fuego between January and April 2017. The wells were drilled to satisfy the remaining work commitments on both blocks.
Rio Cullen Concession – RC x-1002 well
As previously noted, RC x-1002 (Rio Cullen concession, net working interest of 25.78%) was drilled to a final depth of 1,740 meters during March – April 2017 and cased as a potential Springhill formation gas well. Completion operations on RC x-1002 were conducted during May and June 2017 and the well was subsequently tied into company-owned Rio Cullen gas gathering facilities and placed on production on July 19, 2017. Since being placed on production, the well has produced at an average rate of 24,318 m3/d (0.86 mmcfd) of gas plus 1.4 m3/d (9 bpd) of oil and 70 m3/d (440 bpd) of water on a 10 millimetre choke. As of October 1, the well was producing approximately 26,690 m3/d (0.94 mmcfd) of gas plus 97 m3/d (611 bpd) of water on a 12 millimetre choke at a flowing well head pressure of 34 kg/cm2 (480 psi). Readers are cautioned that these initial production rates are not necessarily indicative of long-term performance or of ultimate recovery of hydrocarbons.
Angostura Concession – SM x-1001 well
SM x-1001 (Angostura concession, net working interest of 25.78%) was drilled to a final depth of 2,126 meters and cased as a potential Tobífera and Springhill formation oil well. Preliminary completion operations were conducted during late September 2017 with the following results. The lower Tobífera formation (1,996 – 2,000 meters) was perforated, acid stimulated and swab tested, recovering a total of 120 cubic meters (756 barrels) of spent acid and formation water over a period of 14 hours. This zone was subsequently isolated with a downhole plug, and the upper Tobífera formation was perforated over a three meter interval between 1,910 and 1,913 meters. The well was placed on production test on September 22, and during the ensuing 11 day period ending October 2, flowed a total of 2,719 cubic meters (17,130 barrels) of 35 API gravity oil, or at an average rate of 247 m3/d (1,557 bpd) of oil. During the first eight days of this period flow was controlled through a 50 millimetre choke, and for the final three days of this period the choke size was reduced to 10 millimetres. No water was reported produced during this test period. On October 2, the well was producing approximately 205 m3/d (1,290 bpd) of oil through a 10 millimetre choke and with a flowing well head pressure of 44 kg/cm2 (625 psi). Readers are cautioned that these test results are not necessarily indicative of long-term performance or of ultimate recovery of hydrocarbons. The test result data should be considered to be preliminary until a pressure transient analysis and/or well-test interpretation has been carried out.
SM x-1001 was shut in on October 3 to install recorders and surface facilities and place the upper Tobífera reservoir on long term production test to determine its potential. At this early stage in testing it is too early for the Company to determine the significance of this well. It is possible that the well will ultimately experience high initial decline rates or a short production life. It is also possible that water will be produced by the well in increasing amounts, which increase could be material. Oil produced during the test is being trucked to Company owned storage facilities for processing and subsequent sale.
Brian J. Moss Marisa Tormakh
President & CEO Vice-President & CFO
Ph: (403) 232-1150 Ph: (403) 232-1150
Crown Point Energy Inc. Crown Point Energy Inc.
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 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.
Well-Flow Test Results and Initial Production Rates
Any references in this document to well-flow test results and/or initial production rates are useful in confirming the presence of hydrocarbons, however, such test results and rates are not determinative of the rates at which such wells will continue production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such test results and rates in calculating the aggregate production for the Company. Well-flow test results and initial production rates may be estimated based on other third party estimates or limited data available at the 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 document, well-flow test results and initial production rates are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.
“m3/d” means cubic metres per day.
“mmcfd” means million cubic feet per day.
“bpd” means barrels per day.
“kg/cm2” means kilograms per square centimetre.
“psi” means pounds per square inch.
“API” means American Petroleum Institute gravity, being an indication of the specific gravity of crude oil measured on the API gravity scale.
Forward looking information:
Certain information set forth in this document, including: the potential of the RC x-1002 well to be a productive and economic Springhill formation gas well going forward; the potential of the SM x-1001 well to be a productive and economic Tobífera and Springhill formation oil well going forward; our plans to install recorders and surface facilities and place the SM x-1001 well on long term production test from the upper Tobífera formation to determine its potential; is considered forward-looking information, and necessarily involve risks and uncertainties, certain of which are beyond Crown Point’s control. Such risks include but are not limited to: the possibility that the RC x-1002 well and/or the SM x-1001 well will ultimately experience high initial decline rates and/or a short production life and/or that the amount of water produced by one or both wells will increase, which increase could be material and make one or both wells uneconomic; the risk that the initial production rates and/or well-flow test results are not indicative of the long-term performance of the wells or of ultimate recovery of hydrocarbons from the wells; the risk that the Company will not have the necessary infrastructure to produce, transport, store and ship the hydrocarbons produced from the wells; 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 Crown Point), risks that new government initiatives will not have the consequences the Company believes (including the benefits to be derived therefrom), expropriation/nationalization of assets, price controls on commodity prices, inability to enforce contracts in certain circumstances, the potential for a hyperinflationary economic environment, and other economic and political risks; volatility of commodity prices; currency fluctuations; inability to retain drilling or other necessary oilfield services; delays resulting from or inability to obtain required regulatory approvals; the lack of availability of qualified personnel or management; and the ability to access sufficient capital from internal and external sources. 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 Crown Point will derive therefrom. With respect to forward-looking information contained herein, the Company has made assumptions regarding: the general stability of the economic and political environment in Argentina; the timely receipt of any required regulatory approvals; 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; 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; the ability of the Company to obtain financing on acceptable terms when and if needed; field production rates and decline rates; 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; costs of operational activities in Argentina (including in respect of the operations described herein); 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 Crown Point are included in reports on file with Canadian securities regulatory authorities, including under the heading “Risk Factors” in the Company’s most recent annual information form, and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking information contained in this document are made as of the date of this document, and Crown Point does not undertake any obligation to update publicly or to revise any of the included forward looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities law.
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