Oct-5-2008

Crown Point Provides Update on Tierra del Fuego Operations

TSX-V: CWV: Crown Point Energy Inc. (“Crown Point” or the “Company“) today provided an operations update on its activities in Tierra del Fuego.

As previously reported in our August 29, 2018 press release, two appraisal wells have been drilled on the San Martin structure located on the Company’s La Angostura concession (net working interest 51.56%).

During the first 45 days of production, SM a-1002 produced a total of 13,873 cubic meters (87,258 bbls) of 35° API light oil or an average of 308 cubic meters per day (1,937 bbls/d) plus 1 cubic meter (6 bbls) of basic sediment and water. Flow was restricted through a 16 mm choke at a flowing well head pressure of 23 kg/cm2 (327 psi).The well continues to exhibit strong potential with flow rates over the five days ending October 2 averaging 315 cubic meters per day of oil (1,981 bbls/d) . Associated gas production during the first 45 days of production averaged 19,080 cubic meters per day (674 mcf/d). Gas production is currently being flared pending tie-in to the SM x-1001 facilities, located 0.8 km to the north of the well.

The second appraisal well, SM a-1003, was drilled in July 2018 to a total depth of 2,103 meters and cased as a potential Tobífera formation oil well. Completion and testing of this well has failed to recover any production from the Tobífera zone, which is productive in SM x-1001 and SM a-1002. An evaluation of log data and test results indicate that while the Tobífera zone is structurally high, there is little or none of the natural fracturing evident in the SM x-1001 and SM a-1002 producing wells. The well will be fracture stimulated to enhance inflow later this year when frac services are available. SM a-1003 is located approximately 0.9 km northwest of SM x-1001.
As previously reported, the Company drilled and cased an exploration well (LP x-1001) on its Las Violetas Concession (net working interest 51.56%) as a potential Springhill formation oil and gas discovery. Initial completion operations have now been concluded on this well without positive results. Log data indicates a potentially productive hydrocarbon bearing zone however subsequent testing failed to record any inflow. The well will be fracture stimulated later this year after SM a-1003 has been fractured.

For inquiries please contact:

Brian Moss Marisa Tormakh
President & CEO Vice-President & CFO
Ph: (403) 232-1150 Ph: (403) 232-1150
Crown Point Energy Inc. Crown Point Energy Inc.
bmoss@crownpointenergy.com mtormakh@crownpointenergy.com

 

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 two of the largest producing basins in Argentina, the Austral basin in the province of Tierra del Fuego and the Neuquén basin, in the province of Mendoza. 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.

Advisory

Non-IFRS Measures: Non-IFRS measures do not have any standardized meanings prescribed by IFRS and may not be comparable with the calculation of similar measures used by other entities.  Non-IFRS measures should not be considered alternatives to, or more meaningful than, measures determined in accordance with IFRS as indicators of the Company’s performance.

This press release contains the terms “adjusted income (loss) before taxes”, “adjusted net loss” and “adjusted net loss per share” which management considers to be key measures of performance before the effect of certain expenses that, although classified as operating activities in accordance with IFRS, are not expected to recur with the same magnitude or frequency and/or for which there are no similar expenses in the comparative periods.  For a reconciliation of adjusted income (loss) before taxes, adjusted net loss and adjusted net loss per share to the most directly comparable measures calculated in accordance with IFRS, see the Company’s MD&A.

This press release contains the terms “funds flow from (used by) operations” and “funds flow per share – operations” which should not be considered alternatives to, or more meaningful than, cash flow from (used by) operations and cash flow per share – operations as determined in accordance with IFRS as an indicator of the Company’s performance.  Management uses funds flow from (used by) operations to analyze operating performance and considers funds flow from (used by) operations to be a key measure as it demonstrates the Company’s ability to generate cash necessary to fund future capital investment.  Funds flow per share – operations is calculated using the basic and diluted weighted average number of shares for the period consistent with the calculations of earnings per share.  For a reconciliation of funds flow from (used by) operations to cash flow from (used by) operations, which is the most directly comparable measure calculated in accordance with IFRS, see the Company’s MD&A.

This press release also contains other industry benchmarks and terms, including “operating netbacks” (calculated on a per unit basis as oil, natural gas and NGL revenues less royalties, transportation and operating costs), which is a non-IFRS measure.  See “TDF Operating Netback” for the calculation of operating netback.  Management believes this measure is a useful supplemental measure of the Company’s profitability relative to commodity prices.  Readers are cautioned, however, that operating netbacks should not be construed as an alternative to other terms such as net income as determined in accordance with IFRS as measures of performance.  Crown Point’s method of calculating this measure may differ from other companies, and accordingly, may not be comparable to similar measures used by other companies.

Abbreviations and BOE Presentation: “3-D” means three dimensional. “API” means American Petroleum Institute gravity, being an indication of the specific gravity of crude oil measured on the API gravity scale.  “bbl” means barrel. “bbls” means barrels.   “BOE” means barrels of oil equivalent. “km” means kilometres; “km2” means square kilometres; “m3” means cubic metres. “mcf” means thousand cubic feet. “NGL” means natural gas liquids.  “Q1” means the three months ended March 31.  “Q2” means the three months ended June 30.  “Q3” means the three months ended September 30.  “Q4” means the three months ended December 31. “YPF” means Yacimientos Petrolíferos Fiscales S.A. All BOE conversions in this press release are derived by converting natural gas to oil in the ratio of six mcf of gas to one bbl of oil.  BOE may be misleading, particularly if used in isolation.  A BOE conversion ratio of six mcf of gas to one bbl of oil (6 mcf: 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.  Given that the value ratio based on the current price of crude oil as compared to natural gas in Argentina is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

Forward-looking Information: This document contains forward-looking information.  This information relates to future events and the Company’s future performance.  All information and statements contained herein that are not clearly historical in nature constitute forward-looking information, and the words “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “propose”, “predict”, “potential”, “continue”, “aim”, “budget” or the negative of these terms or other comparable terminology are generally intended to identify forward-looking information.  Such information represents the Company’s internal projections, estimates, expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance.  This information involves known or unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.  In addition, this document may contain forward-looking information attributed to third party industry sources.  Crown Point believes that the expectations reflected in this forward-looking information are reasonable; however, undue reliance should not be placed on this forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. This press release contains forward-looking information concerning, among other things, the following: under “Highlights” and “Operational Update – Tierra del Fuego Concession”, our belief that SM a-1002 has the potential to be a Tobífera formation oil well, our belief that SM a-1003 has the potential to be a Tobífera formation oil well, our belief that LR x-1001 has the potential to be a Springhill formation oil and gas discovery well, the operations that the Company intends to conduct on certain of its TDF assets and the expected timing of certain operations; under “Operational Update – Cerro de Los Leones Concession”, the operations that the Company intends to conduct on certain of its CLL assets and the expected timing of certain operations; under “Outlook”, our estimated capital expenditures for the last half of 2018, the allocation of such capital expenditures between our TDF and CLL concessions, the anticipated elements of this capital program, and the average crude oil and natural gas prices that the Company expects to receive for the six months ended December 31, 2018; under “About Crown Point”, all elements of the Company’s business strategy. The reader is cautioned that such information, although considered reasonable by the Company, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided in this document as a result of numerous known and unknown risks and uncertainties and other factors. A number of risks and other factors could cause actual results to differ materially from those expressed in the forward-looking information contained in this document including, but not limited to, the following: the risks and other factors described under “Business Risks and Uncertainties” in our MD&A for the three and six months ended June 30, 2018 and under “Risk Factors” in the Company’s most recently filed Annual Information Form, which is available for viewing on SEDAR at www.sedar.com. In addition, note that information relating to reserves and resources is deemed to be forward-looking information, as it involves the implied assessment, based on certain estimates and assumptions that the reserves and resources described can be economically produced in the future. With respect to forward-looking information contained in this document, the Company has made assumptions regarding, among other things: that the arbitration launched by Roch S.A. in connection with the Acquisition of Apco Austral will not expose the Company to any losses; the impact of inflation rates in Argentina and the devaluation of the Argentine peso against the USD on the Company; the amount of royalties that the Company will have to pay under the royal agreement entered in to in connection with the Acquisition; the performance of Apco Austral and its underlying assets; the impact of increasing competition; the general stability of the economic and political environment in which the Company operates, including operating under a consistent regulatory and legal framework in Argentina; future oil, natural gas and NGL prices (including the effects of governmental incentive programs thereon); the timely receipt of any required regulatory approvals; the ability of the Company to continue as a going concern without the loss of any assets; 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; the ability of the Company to obtain financing on acceptable terms when and if needed; the ability of the Company to service its debt repayments when required; 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; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products.  Management of Crown Point has included the above summary of assumptions and risks related to forward-looking information included in this document in order to provide investors with a more complete perspective on the Company’s future operations.  Readers are cautioned that this information may not be appropriate for other purposes. Readers are cautioned that the foregoing lists of factors are not exhaustive.  The forward-looking information contained in this document are expressly qualified by this cautionary statement. The forward-looking information contained herein is made as of the date of this document and the Company disclaims any intent or obligation to update publicly any such forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable Canadian securities laws.

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.