TSX-V: CWV: Crown Point Energy Inc. (“Crown
Point”, the
“Company”,
"
we" or "
our"
)
is pleased to provide an update on the status of its proposed
acquisition of a 100% working interest in the Piedra Clavada and
Koluel Kaike hydrocarbon exploitation concessions located in the
San Jorge Basin, Santa Cruz Province, Argentina (the
"
Concessions"), the details of which were
disclosed by press release on February 9, 2024.
Completion of the acquisition remains subject to
the receipt of all necessary regulatory and Provincial approvals,
including the approval of the TSX Venture Exchange (the
"TSXV"), and the satisfaction of other customary
closing conditions. The acquisition is currently expected to close
in May 2024. The Company is currently in the process of obtaining
the approval of the Province of Santa Cruz and arranging the
necessary financing to fund the cash portion of the purchase
price.
The Company's common shares have been halted by
the TSXV until the Company has provided the TSXV with applicable
documentation, including a reserve report in respect of the
Concessions that is prepared by an independent third party and
complies with National Instrument 51-101 ("NI
51-101"). The reserves report is now complete and
certain reserve information for the Concessions is set forth
below. As a result, the Company has been advised by the TSXV
that the halt will be lifted and the Company's common shares will
commence trading at the opening of trading on Thursday, April 18,
2024.
RPS Group, Inc (“RPS”), an
independent qualified reserves evaluator, evaluated the crude oil
reserves attributable to the Concessions as at December 31, 2023
based on forecast prices and costs and prepared its report in
accordance with NI 51-101 and the Canadian Oil and Gas Evaluation
Handbook (the "COGE Handbook"). RPS’ evaluation
report (titled "Hydrocarbon Liquids & Natural Gas Reserves
Evaluation Report at Year End 2023 – Piedra Clavada & Koluel
Kaike – Argentina) (the "RPS Report") also
presents the estimated net present value of future net revenue
associated with the Concessions’ reserves. A summary of the
Concessions’ crude oil reserves, as evaluated by RPS, and the
associated net present value of future net revenue before and after
tax associated therewith as at December 31, 2023 is presented
below. The estimates of reserves and future net revenue contained
in the RPS Report have been made assuming that development of the
Concessions will occur, without regard to the likely availability
to Crown Point of funding required for that development. All dollar
figures are expressed in United States dollars
("USD" or "US$") unless otherwise
stated, and "MMUS$" means millions of USD.
The following table presents, in the aggregate,
the Concessions’ gross and net proved and probable reserves,
estimated using forecast prices and costs, by product type and in
total, as of December 31, 2023.
SUMMARY OF
RESERVES AS OF DECEMBER 31, 2023(Forecast Prices &
Costs) |
|
Light and
Medium Crude Oil |
Heavy Crude
Oil |
Total
Reserves |
(Mbbl) |
(Mbbl) |
(Mbbl) |
Reserves Category (1) |
Gross |
Net |
Gross |
Net |
Gross |
Net |
Proved: |
|
|
|
|
|
|
Developed Producing |
4,507 |
3,809 |
11,356 |
9,591 |
15,863 |
13,400 |
Developed Non-Producing |
3,543 |
2,987 |
2,781 |
2,346 |
6,324 |
5,333 |
Undeveloped |
4,865 |
4,105 |
2,689 |
2,270 |
7,554 |
6,375 |
Total Proved |
12,914 |
10,901 |
16,826 |
14,207 |
29,740 |
25,108 |
Total Probable |
8,957 |
7,545 |
9,169 |
7,724 |
18,126 |
15,269 |
Total Proved plus Probable |
21,871 |
18,446 |
25,996 |
21,931 |
47,866 |
40,377 |
(1) The definitions of the
various categories of reserves are those set out in NI 51-101 and
the COGE Handbook.
The following tables disclose, in the aggregate,
the net present value of the Concessions’ future net revenue
attributable to the reserves categories in the table above,
estimated using forecast prices and costs, before and after
deducting future income tax expenses, and calculated without
discount and using discount rates of 5%, 10%, 15% and 20%.
SUMMARY OF
NET PRESENT VALUE OF FUTURE NET REVENUE AS OF DECEMBER 31, 2023
(Forecast Prices & Costs) |
|
Net Present
Values of Future Net Revenue Before Income Taxes (2) |
Discounted
at (%/year) |
Reserves Category (3) |
0% |
5% |
10% |
15% |
20% |
MMUS$ |
MMUS$ |
MMUS$ |
MMUS$ |
MMUS$ |
Proved: |
|
|
|
|
|
Developed Producing |
126.42 |
|
105.03 |
|
85.64 |
|
70.93 |
|
60.10 |
|
Developed Non-Producing |
78.65 |
|
33.61 |
|
12.81 |
|
2.59 |
|
-2.67 |
|
Undeveloped |
157.16 |
|
71.94 |
|
30.12 |
|
8.29 |
|
-3.61 |
|
Total Proved |
362.23 |
|
210.58 |
|
128.57 |
|
81.82 |
|
53.82 |
|
Total Probable |
367.55 |
|
141.73 |
|
51.78 |
|
15.11 |
|
0.26 |
|
Total Proved + Probable |
729.78 |
|
352.31 |
|
180.35 |
|
96.93 |
|
54.08 |
|
|
|
|
|
|
|
- The estimated net present values of future net
revenues disclosed do not represent fair market value.
- The definitions of the various categories of reserves are those
set out in NI 51-101 and the COGE Handbook.
SUMMARY OF
NET PRESENT VALUE OF FUTURE NET REVENUE AS OF DECEMBER 31, 2023
(Forecast Prices & Costs) |
|
Net Present
Values of Future Net Revenue After Income Taxes (4) |
Discounted
at (%/year) |
Reserves Category (5) |
0% |
5% |
10% |
15% |
20% |
MMUS$ |
MMUS$ |
MMUS$ |
MMUS$ |
MMUS$ |
Proved: |
|
|
|
|
|
Developed Producing |
88.35 |
|
68.08 |
|
53.42 |
|
43.26 |
|
36.13 |
|
Developed Non-Producing |
53.58 |
|
19.33 |
|
4.15 |
|
-2.90 |
|
-6.26 |
|
Undeveloped |
105.09 |
|
39.06 |
|
7.42 |
|
-8.48 |
|
-16.65 |
|
Total Proved |
247.02 |
|
126.47 |
|
64.98 |
|
31.88 |
|
13.22 |
|
Total Probable |
238.91 |
|
72.26 |
|
11.66 |
|
-9.39 |
|
-15.40 |
|
Total Proved + Probable |
485.93 |
|
198.72 |
|
76.64 |
|
22.49 |
|
-2.18 |
|
- The estimated net present values of future net
revenues disclosed do not represent fair market value.
- The definitions of the various categories of reserves are those
set out in NI 51-101 and the COGE Handbook.
The following table sets forth, for each product
type, the pricing assumptions and the inflation rate assumptions
used by RPS in estimating the reserves data disclosed herein as at
December 31, 2023.
|
SUMMARY OF PRICING AND INFLATION RATE
ASSUMPTIONSAS OF DECEMBER 31, 2023 (Forecast Prices &
Costs) |
Year |
Brent Crude Oil Price
(1)US$/bbl |
Escalante Crude Oil Price
(2)US$/bbl |
Piedra Clavada Sales Oil Price
(3)US$/bbl |
Koluel Kaike Sales Oil Price
(3)US$/bbl |
Inflation
Rate(4)% / Year |
2024 |
78.00 |
66.35 |
64.20 |
65.30 |
0 |
2025 |
78.00 |
66.35 |
64.20 |
65.30 |
2 |
2026 |
76.00 |
64.35 |
62.25 |
63.31 |
2 |
2027 |
75.00 |
63.35 |
61.27 |
62.32 |
2 |
2028 |
75.00 |
63.35 |
61.27 |
62.32 |
2 |
2029 |
75.00 |
63.35 |
61.27 |
62.32 |
2 |
2030 |
77.00 |
65.35 |
63.22 |
64.31 |
2 |
2031 |
79.00 |
67.35 |
65.18 |
66.29 |
2 |
2032 |
81.00 |
69.35 |
67.13 |
68.28 |
2 |
2033 |
84.48 |
72.83 |
70.53 |
71.73 |
2 |
2034 |
86.17 |
74.52 |
72.18 |
73.41 |
2 |
2035 |
87.89 |
76.24 |
73.86 |
75.12 |
2 |
2036 |
89.65 |
78.00 |
75.58 |
76.86 |
2 |
2037 |
91.44 |
79.79 |
77.33 |
78.64 |
2 |
20382039 |
93.2795.13 |
81.6283.48 |
79.1180.94 |
80.4682.31 |
22 |
- Forecast pricing for Brent crude oil - RPS price deck reference
date as of January 1, 2024.
- Escalante crude oil is 24 degree API sweet crude oil
characteristic of the oil produced from the San Jorge Basin.
Escalante crude oil price estimated as Brent forecast oil price
minus $11.65 US$/bbl reflecting the actual 2023 discount to
Brent.
- Sales price including API gravity correction, bouy, storage,
transport and turnover tax deductions.
- Inflation Rate: RPS desk scenario used to forecast cost
adjustments.
For inquiries please contact:
Gabriel
Obrador
President &
CEO
Ph: (403)
232-1150
Crown Point Energy
Inc.
gobrador@crownpointenergy.com |
Marisa
TormakhVice-President, Finance & CFOPh: (403) 232-1150Crown
Point Energy Inc.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 Argentina. Crown Point's exploration and
development activities are focused in three producing basins in
Argentina, the Austral basin in the province of Tierra del Fuego,
and the Neuquén and Cuyo basins 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.
Oil and Gas Advisories
"bbl" means barrel. "Mbbl" means thousands of
barrels.
The reserves estimates contained in this news
release represent the gross and net reserves attributable to the
Concessions as at December 31, 2023. Gross reserves are
defined under NI 51-101 as the working interest (operating or
non-operating) share before deduction of royalties and without
including any of the royalty interests. Net reserves are
defined under NI 51-101 as the working interest (operating or
non-operating) share after deduction of royalty obligations, plus
the royalty interests in reserves. It should not be assumed
that the present worth of estimated future net revenues presented
in the tables above represents the fair market value of the
reserves. There is no assurance that the forecast price and cost
assumptions will be attained and variances could be material. The
recovery and reserves estimates of the crude oil reserves provided
herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual crude oil reserves may
be greater than or less than the estimates provided herein.
All future net revenues are estimated using
forecast prices arising from the anticipated development and
production of the reserves, net of the associated royalties,
operating costs, development costs, and abandonment and reclamation
costs and are stated prior to provision for interest and general
and administrative expenses. Future net revenues have been
presented on a before and after tax basis.
The estimates of reserves and future net revenue
for individual properties may not reflect the same confidence level
as estimates of reserves and future net revenue for all properties,
due to the effects of aggregation.
Forward Looking Statements
Certain information set forth in this document
is considered forward-looking information, and necessarily involves
risks and uncertainties, certain of which are beyond Crown Point’s
control. Forward-looking information herein includes: our
expectations regarding the terms, conditions and timing for closing
the proposed acquisition of the Concessions; and the forecast
pricing and inflation rate assumptions set forth herein. In
addition, information relating to the reserves attributable to the
Concessions is deemed to be forward-looking information, as it
involves the implied assessment, based on certain estimates and
assumptions, that the reserves described can be economically
produced in the future. Such risks include but are not
limited to: that the Company is unable to complete the proposed
acquisition of the Concessions on the terms described herein or at
all, whether due to the inability of the Company to obtain
financing to fund the cash portion of the purchase price, obtain
requisite regulatory or governmental approvals, satisfy applicable
conditions precedent, or otherwise; the risks that pandemics and
outbreaks of communicable disease such as COVID-19 pose to the oil
and gas industry generally and our business in particular; 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; 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, the imposition of currency controls, risks
associated with a default on Argentine government debt, and other
economic and political risks; volatility of commodity prices;
currency fluctuations; imprecision of reserve estimates;
environmental risks; competition from other producers; inability to
retain drilling services; incorrect assessment of value of
acquisitions and failure to realize the benefits therefrom; delays
resulting from or inability to obtain required regulatory
approvals; the lack of availability of qualified personnel or
management; stock market volatility; inability to access sufficient
capital from internal and external sources; the need to shut-in,
flare and/or curtail production as a result of a lack of
infrastructure and/or damage to existing infrastructure; and
economic or industry condition changes. 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: that the Company will
complete the proposed acquisition of the Concessions on the terms
described herein on a timely basis, including the ability of the
Company to obtain the requisite financing to fund the cash portion
of the purchase price on acceptable terms, obtain all requisite
regulatory and governmental approvals and satisfy all applicable
conditions precedent; the impact of increasing competition; 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 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, transportation and facility repair,
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; currency, exchange,
inflation and interest rates; the regulatory framework regarding
royalties, commodity price controls, currency 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.sedarplus.ca). 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.
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.
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