Crown Point Provides Operations Update
March 27 2020 - 7:35PM
(TSX-V:CWV)
: Crown Point Energy Inc. (“Crown
Point” or the “Company”) today provided an update regarding its
operations at Tierra del Fuego ("TDF").
Tierra del Fuego – La Angostura
Concession (WI 34.74%)
As previously reported, the main San Martin oil
well producer, SM x-1001 began to produce some water in late
January, 2020 and the water cut subsequently increased in early
February to approximately 50% of the total fluid production from
this well, which had averaged 1,470 (net 511) bopd from the upper
Tobífera reservoir in December 2019. The well was shut in on
February 18, 2020, pending a workover to evaluate the underlying
middle Tobífera section (oil bearing in the SM a-1003 oil well
located approximately 1 km to the NNW of SM x-1001), followed by a
test and evaluation of the uppermost Tobífera section.
The production testing and evaluation of both
the middle and upper Tobífera sections was completed on March 17,
2020. The production tests of the middle Tobífera section recovered
formation water and the zones (1987-95 m and 2013-20 m) were
abandoned. The test of the uppermost Tobífera section (1871-76 m),
located 34 m above the original producing upper Tobífera zone,
flowed at an average rate of 1,576 barrels of oil per day with no
reported water (0.3% BS&W) over a 24 hour period through a 25
mm choke at a flowing well head pressure of 232 psi. The well was
placed back on production on March 18 at an average restricted rate
of 716 bopd (net 249 bopd) over the ensuing 7 days with negligible
water cut at a flowing well head pressure of 582 psi through an 8
mm choke, and during which the well produced a total of 5,012
barrels of oil.
San Martin oil production is trucked and sold to
the Chilean State Oil Company (Enap) terminal located at San
Gregorio, Magallanes Province, Chile. On March 23, Enap announced
the suspension until further notice of all deliveries, due to an
outbreak of Covid-19 at the terminal. As a consequence of
limited oil storage field capacity, the San Martin field was shut
in on March 24 and will remain so until the restrictions on
deliveries are lifted. The alternative option to evacuate oil from
TDF, the Cruz del Sur storage and offshore loading facility
operated by YPF, remains closed pending completion of ongoing
repairs and maintenance. The facilities are expected to be
re-opened during Q3, 2020. The Company’s local gas
sales and its gas exports through the San Martin sales gas
pipeline, which crosses the Straits of Magellan and connects TDF to
mainland industrial and residential markets, remain
uninterrupted.
About Crown Point
Crown Point is an international oil and gas
exploration and development company incorporated in Alberta,
Canada, trading on the TSX Venture Exchange and with operations in
Argentina. 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.
Abbreviations: "WI" means
working interest. "bopd" means barrels of oil per day.
"km" means kilometer. "m" means meters. "BS&W"
means basic sediment and water. "psi" means pounds per square
inch. "mm" means millimeters. "Q3" means the three
month period ended September 30. "YPF" means Yacimientos
Petrolíferos Fiscales S.A.
Initial Production or Test
Rates: Any references in this news
release to initial production or production test rates are useful
in confirming the presence of hydrocarbons, however, such rates are
not determinative of the rates at which such wells will continue
production and decline thereafter. Additionally, such rates may
also include recovered "load oil" fluids used in well completion
stimulation. While encouraging, readers are cautioned not to place
reliance on such rates in calculating the aggregate production for
the Company. Initial production rates may be estimated based on
other third party estimates or limited data available at this 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 news release initial
production or test results are not necessarily indicative of
long-term performance of the relevant well or fields or of ultimate
recovery of hydrocarbons.
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 may constitute 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. 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: our plans for the SM x-1001 oil well
and the San Martin field, including our intention to shut in the
field until delivery restrictions are lifted; and the Company's
business strategies. 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 that COVID-19 poses to
the oil and gas industry generally and our business in particular,
including the risk that the demand for, and therefore the price of,
hydrocarbons will remain depressed for a significant period of
time, the risk that our staff and/or the staff of third parties on
whom we rely to carry out our operations are unable to perform
their duties such that we are unable to continue our operations in
part or in whole, the risk that we are unable to obtain supplies
and other equipment that we need for our operations due to delays
or failures in supply chains, and the risk that the infrastructure
on which we rely to produce, transport and sell the hydrocarbons we
produce suffer intermittent outages or cease to operate at all, all
of which could adversely impact our ability to operate profitably
or at all; the risk that our plans for the SM x-1001 well, or the
San Martin field, change; the risk that the Company determines that
the SM x-1001 well is uneconomic; the risk that the San Martin
field remains shut in for an extended period of time; the risk that
the Company changes its business strategies; risks associated with
oil and gas exploration, development, exploitation, production,
marketing and transportation, including the risk that the
infrastructure on which we rely to produce, transport and sell our
products breaks down and requires parts that are not readily
available or repairs that cannot be made on a timely basis, and
which impair our ability to operate and/or sell our products; and
the risks and other factors described under “Risk Factors” in the
Company’s most recently filed Annual Information Form, which is
available for viewing on SEDAR at www.sedar.com. With respect
to forward-looking information contained in this document, the
Company has made assumptions regarding, among other things: the
impact that COVID-19 will have on our operations and the length of
time that such impact will persist; that the SM x-1001 well will
continue to be an economic oil well based on initial test and
production results from the uppermost Tobífera sections; 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 natural gas liquids prices; 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; the timing and costs of pipeline, storage,
transportation and facility repair, construction and expansion and
the ability of the Company to secure adequate product
transportation; and the ability of the Company to obtain financing
on acceptable terms when and if needed to finance its operations.
Management of Crown Point has included the above summary of
assumptions and risks related to forward-looking information 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.
For inquiries please contact:
Brian Moss
President & CEO
Ph: (403) 232-1150
Crown Point Energy Inc.
bmoss@crownpointenergy.com
Marisa Tormakh
Vice-President & CFO
Ph: (403) 232-1150
Crown Point Energy Inc.
mtormakh@crownpointenergy.com
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