{"id":1562,"date":"2017-08-18T10:58:38","date_gmt":"2017-08-18T14:58:38","guid":{"rendered":"https:\/\/crownpointenergy.com\/?p=1562"},"modified":"2017-08-18T10:58:38","modified_gmt":"2017-08-18T14:58:38","slug":"aug-17-2017","status":"publish","type":"post","link":"https:\/\/crownpointenergy.com\/?p=1562","title":{"rendered":"Aug-17-2017"},"content":{"rendered":"

Crown Point Announces Operating and Financial Results\u00a0<\/strong>for the Three and Six Months Ended June 30, 2017<\/strong><\/a><\/p>\n

TSX-V:\u00a0 CWV: Crown Point Energy Inc. (\u201cCrown Point\u201d, <\/strong>the \u201cCompany\u201d <\/strong>or “we<\/strong>“)<\/strong> today announced its operating and financial results for the three and six months ended June 30, 2017. Copies of the Company\u2019s unaudited condensed interim consolidated financial statements and Management\u2019s Discussion and Analysis (\u201cMD&A<\/strong>\u201d) filings for the three and six months ended June 30, 2017 are being filed with Canadian securities regulatory authorities and will be made available under the Company\u2019s profile at www.sedar.com<\/a> and on the Company\u2019s website at www.crownpointenergy.com<\/a>. All dollar figures are expressed in United States dollars (“USD<\/strong>“) unless otherwise stated.<\/p>\n

In the following discussion, the three and the six months ended June 30, 2017 may be referred to as \u201cQ2 2017\u201d and \u201cthe June 2017 period\u201d, respectively, the comparative three and six months ended June 30, 2016 referred to as \u201cQ2 2016\u201d and \u201cthe June 2016 period\u201d, respectively, and the previous three months ended March 31, 2017 referred to as \u201cQ1 2017\u201d.<\/p>\n

Operational update<\/strong><\/p>\n

Tierra del Fuego Concession (“TDF”)<\/strong><\/p>\n

The Company and its partners commenced preparation of the two drilling sites (RC x-1002 in Rio Cullen and SM x-1001 in La Angostura) in late December 2016.<\/p>\n

SM x-1001 was drilled to a total depth of 2,123 m in Q1 2017 and cased with potential pay in the Tob\u00edfera and Springhill formations. The well will be completed and tested during the second half of 2017.<\/p>\n

RC x-1002 was drilled to a final depth of 1,740 m in early April 2017 and cased as a potential gas well. Completion operations were carried out during May and June 2017. Two lower intervals in the Tob\u00edfera section tested formation water with only traces of gas. The overlying Springhill formation was then perforated, fracture stimulated and flow tested. Two extended flow tests were performed; the first was conducted over seven days, during which the well flowed gas at rates between 1.4 MMcf per day (40,000 m3<\/sup> per day) and 3.6 MMcf per day (104,000 m3<\/sup> per day) (while averaging 2.1 MMcf per day or 61,340 m3<\/sup> per day) with between 145 bbls per day (23 m3<\/sup> per day) to 530 bbls per day (84 m3<\/sup> per day) of associated formation water. Flowing well head pressure averaged between 1058 psi and 1147 psi (72 kg\/cm2<\/sup> and 78 kg\/cm2<\/sup>). Choke sizes during this test period were 8, 10 and 12 mm. The second test was conducted over five days on 6, 8 and 10 mm choke sizes. The well flowed gas at rates between 24,000 m3<\/sup> per day and 65,000 m3<\/sup> per day (while averaging 1.2 MMcf per day or 35,400 m3<\/sup> per day) with between 290 bbls per day (46 m3<\/sup> per day) and 844 bbls per day (134 m3<\/sup> per day) of formation water. Flowing well head pressures during the second test period ranged between 676 psi and 1000 psi (46 kg\/cm2<\/sup> and 68 kg\/cm2<\/sup>). Total gross production for the two test periods was 15.1 MMcf (431,800 m3<\/sup>) of gas and 1,985 bbls (315 m3<\/sup>) of formation water. The well was subsequently tied into Company-owned Rio Cullen gas gathering facilities and placed on production on July 19, 2017.<\/p>\n

The Company has fulfilled the Rio Cullen and La Angostura concession expenditure commitments and exercised the option to extend the term of each concession to August 2026 by making the minimum cash payment to the Province of TDF. For each concession, the cash payment is a minimum of $32,500 to a maximum of $1.29 million (net to the Company’s interest) and the investment commitment is a minimum of $0.46 million to a maximum of $9.28 million (net to the Company’s interest). The investment commitment for exploration and development work will be determined on a sliding scale based on a proved plus probable reserves range discovered during the initial exploration period of between zero and greater than 18 million BOE. The total cash payment and investment commitment have not yet been determined by the Province of TDF and the Company has not yet received formal approval of the concession extensions.<\/p>\n

Cerro de Los Leones Concession <\/strong><\/p>\n

The Company has a 100% working interest in the 100,907 acre area covered by the Cerro de Los Leones (\u201cCLL<\/strong>\u201d) Concession Permit, which is located in the northern portion of the Neuqu\u00e9n Basin in the Province of Mendoza, Argentina.<\/p>\n

Crown Point has designed a fracture stimulation program at an estimated cost of $0.5 million to improve production rates at VdS x-1. The Company is planning to perform the fracture stimulation on VdS x-1 in Q3 or Q4 2017, subject to equipment availability.<\/p>\n

On March 21, 2017, the Company received formal approval from the Mendoza provincial government to extend the deadline to acquire 234km2<\/sup> of 3-D seismic until January 22, 2018 and informally agreed to extend the commitment to drill one exploration well for an unspecified period following the acquisition of seismic.<\/p>\n

The Company is seeking a partner in the CLL concession to share future capital costs and provide capital cost recovery opportunities on existing and previous capital projects.<\/p>\n

Outlook<\/strong><\/p>\n

Crown Point estimates a total of $8.2 million of capital expenditures for 2017 comprised of $3.7 million of expenditures on the TDF concessions and $4.5 million of expenditures on the CLL concession (which will be reduced if the Company obtains a partner at CLL). Crown Point expects to meet these obligations, along with its other anticipated expenses, using funds flow from operations, cash proceeds received from the disposition of Petr\u00f3leo Plus bonds, as well as proceeds received under the New Gas Incentive Program and additional debt and\/or equity financings and potential joint venture arrangements.<\/p>\n

The Company anticipates the following activities to occur during Q3 2017 and Q4 2017 at a total estimated cost of $6.1 million:<\/p>\n