{"id":1593,"date":"2017-11-20T12:56:51","date_gmt":"2017-11-20T17:56:51","guid":{"rendered":"https:\/\/crownpointenergy.com\/?p=1593"},"modified":"2017-11-20T12:56:51","modified_gmt":"2017-11-20T17:56:51","slug":"nov-17-2017","status":"publish","type":"post","link":"https:\/\/crownpointenergy.com\/?p=1593","title":{"rendered":"Nov-17-2017"},"content":{"rendered":"

Crown Point Announces Operating and Financial Results\u00a0<\/strong>for the Three and Nine Months Ended September 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 nine months ended September 30, 2017.<\/p>\n

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 nine months ended September 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 nine months ended September 30, 2017 may be referred to as \u201cQ3 2017\u201d and \u201cthe September 2017 period\u201d, respectively, the comparative three and nine months ended September 30, 2016 referred to as \u201cQ3 2016\u201d and \u201cthe September 2016 period\u201d, respectively, and the previous three months ended June 30, 2017 referred to as \u201cQ2 2017\u201d.<\/p>\n

OPERATIONAL UPDATE<\/strong><\/p>\n

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

Rio Cullen and La Angostura<\/u> Concessions<\/u><\/p>\n

SM x-1001 (Angostura concession, net working interest of 25.78%) was drilled to a final depth of 2,126 m and cased as a potential Tob\u00edfera and Springhill formation oil well. Preliminary completion operations were conducted during late September 2017. The lower Tob\u00edfera formation (1,996 m to 2,000 m) was perforated, acid stimulated, and swab tested, recovering a total of 120 m3 (756 bbls) of spent acid and formation water over a period of 14 hours. This zone was subsequently isolated with a downhole plug, and the upper Tob\u00edfera formation was perforated over a three-meter interval between 1,910 m and 1,913 m. The well was placed on production test on September 22, 2017 and during the ensuing 11-day period ending October 2, 2017, flowed a total of 2,719 m3 (17,130 bbls) of 35 API gravity oil, or at an average rate of 247 m3 (1,557 bbls) of oil per day (gross). During the first eight days of this period, flow was controlled through a 50 mm choke, and for the final three days of this period, the choke size was reduced to 10 mm.\u00a0 No water was reported produced during this test period.<\/p>\n

SM x-1001 was shut-in on October 3, 2017 to install recorders and surface facilities and place the upper Tob\u00edfera reservoir on a long-term production test. Testing commenced on October 16, 2017 with flow restricted through choke sizes ranging between 6 mm and 14 mm. Total reported gross production from September 22 to October 31, 2017 was 6,284 m3 (net 1,620 m3) or 39,589 bbls (net 10,206 bbls) of oil. During the 30-day period that the well was on production, it produced at an average rate of 210 m3 (1,323 bbls) of oil per day (gross).\u00a0 No water was reported produced during this test period.\u00a0 The average production rate on October 31, 2017 was 143 m3 (900 bbls) of 34 API oil per day (gross) plus 8,043 m3 (284 mcf) of associated natural gas per day through an 8 mm choke at a flowing wellhead pressure of 54.8 kg\/cm2 (806 psi). The Company continues to perform monitored testing to fully determine the significance of the Upper Tob\u00edfera reservoir. Oil produced during the long-term production test is being trucked to Company-owned storage facilities for processing and subsequent sale.<\/p>\n

As previously reported, RC x-1002 (Rio Cullen concession, net working interest of 25.78%) was drilled to a final depth of 1,740 m during March and 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.<\/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).\u00a0 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.\u00a0 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

Las Violetas Concession<\/u><\/p>\n

The Company has identified a number of older producing and non-producing gas wells on the Las Violetas concession as candidates for intervention and possible fracture stimulation to restore and\/or improve production. Two wells identified for intervention will be re-entered during Q4 2017.<\/p>\n

Prospect identification and evaluation to develop additional exploitation, step-out and appraisal locations for inclusion in the 2018 capital program on the Las Violetas concession is ongoing.<\/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 its Vega del Sol x-1 well (“VdS x-1<\/strong>“).\u00a0 The Company is planning to perform the fracture stimulation on VdS x-1 in Q2 2018, subject to equipment availability.<\/p>\n

In Q4 2016, the Company applied for an extension to the Period 2 exploration period which was to expire on May 21, 2017. The extension was requested to allow the Company time to acquire 234km2<\/sup> of 3-D seismic and drill one exploration well. In March 2017, the Mendoza provincial government formally agreed to extend the deadline to acquire 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.\u00a0 In October 2017, the Company requested a further extension to the deadline to acquire seismic until April 2018 and defer drilling of the commitment exploration well until the second half of 2018.\u00a0 The Company has not yet received formal approval for the extension and deferral.<\/p>\n

The Company is actively 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 $9.8 million of capital expenditures for Q4 2017 and fiscal 2018 comprised of $2.5 million of expenditures on the TDF concessions and $7.3 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 the net proceeds from its recently completed rights offering, 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 Q4 2017 and the first half of 2018 at a total estimated cost of $6.3 million:<\/p>\n