Crown Point Energy Inc. ("Crown Point" or the "Company") (TSX VENTURE:CWV) today
announces its operating and financial results for the three months and year
ended December 31, 2013. Copies of the Company's audited consolidated financial
statements, Management's Discussion and Analysis ("MD&A") and Annual Information
Form (containing the Company's National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities ("NI 51-101") disclosure for the year
ended December 31, 2013) are being filed with Canadian securities regulatory
authorities and will be made available under the Company's profile at
www.sedar.com and on the Company's website at www.crownpointenergy.com. All
dollar figures are expressed in United States dollars unless otherwise stated,
and M$ means thousands of U.S. dollars.
FINANCIAL AND OPERATING HIGHLIGHTS
Highlights for the year ended December 31, 2013 include:
-- Cerro de Los Leones - 100% interest La Hoyada x-1 well drilled and cased
as a potential conventional Vaca Muerta oil well.
-- Tierra del Fuego Concessions Extended - Approval of ten year extensions
to August, 2026 received.
-- Ten Well Initial Tierra del Fuego Drilling Program - Drilling operations
expected to commence in late April 2014.
-- Argentina New Gas Incentive Program - On March 30, 2014, Crown Point
submitted to the Argentine Government its formal proposal for
participation in the New Gas Incentive Program for smaller companies
announced in November 2013.
-- Average Daily Sales Volumes: 1,797 BOEPD.
-- Operating Netback per BOE: $13.93.
-- Funds Flow From Operations: $7.5 million.
-- Petro Plus Credits - The Company received proceeds of $6.0 million for
the sale of Petroleo Plus Credits.
-- Total Corporate Proved Reserves: 3.43 million BOE (gross working
interest).
-- Total Proved plus Probable Reserves: 5.75 million BOE (gross working
interest).
FINANCIAL AND OPERATING RESULTS
Results for the three months and year ended December 31, 2013 include:
-- Average Daily Sales Volumes: 1,667 BOEPD and 1,797 BOEPD for the three
months and year ended December 31, 2013, respectively, as compared to
2,053 BOEPD for the four months ended December 31, 2012 and 727 BOEPD
for the year ended August 31, 2012(1).
-- Operating Netback per BOE: $14.16 and $13.93 for the three months and
year ended December 31, 2013, respectively, as compared to $15.81 for
the four months ended December 31, 2012 and $20.92 for the year ended
August 31, 2012(1). As Tierra del Fuego volumes, which include a large
percentage of natural gas volumes that earn a lower operating netback
than oil sales volumes from the El Valle area, are only included in the
June 1 to August 31 portion of the year ended August 31, 2012, the
operating netback is higher for the year ended August 31, 2012.
-- Funds Flow From (Used In) Operations: $2.2 million and $7.5 million for
the three months and year ended December 31, 2013, respectively,
compared to $2.5 million for the four months ended December 31, 2012 and
$(0.6) million for the year ended August 31, 2012(1).
Operating Netbacks - Total Company
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months Four months
ended Year ended ended Year ended
December 31, December 31, December 31, August 31,
2013 2013 2012 2012
----------------------------------------------------------------------------
Total sales
volumes (BOE) 153,327 655,788 250,411 266,215
Average daily
sales volumes
(BOEPD) 1,667 1,797 2,053 727
----------------------------------------------------------------------------
Oil and gas
revenue $ 5,208,744 $ 21,716,647 $ 8,298,961 $ 10,768,464
Royalties (921,206) (4,062,015) (1,474,906) (2,383,336)
Operating costs (2,115,637) (8,522,994) 2,865,659 2,816,568
----------------------------------------------------------------------------
Operating
netback $ 2,171,901 $ 9,131,638 $ 9,689,714 $ 11,201,696
----------------------------------------------------------------------------
Per BOE
Oil and gas
revenue $ 33.97 $ 33.12 $ 33.14 $ 40.45
Royalties (6.01) (6.19) (5.89) (8.95)
Operating costs (13.80) (13.00) (11.44) (10.58)
----------------------------------------------------------------------------
Operating
netback $ 14.16 $ 13.93 $ 15.81 $ 20.92
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Financial and operating results for the year ended August 31, 2012 only
include results from the Tierra del Fuego area from May 28 to August
31, 2012 as the Company's interests in the area were not acquired until
May 28, 2012.
RESERVES
McDaniel & Associates Consultants Ltd. ("McDaniel"), an independent qualified
reserves evaluator, evaluated the oil and natural gas reserves attributable to
all of Crown Point's properties as at December 31, 2013 based on forecast prices
and costs and in accordance with NI 51-101 and the Canadian Oil and Gas
Evaluation Handbook. McDaniel's evaluation also presents the estimated net
present value of future net revenue of Crown Point. McDaniel's report dated
March 7, 2014 on Crown Point's oil and gas reserves as at December 31, 2013 is
summarized below:
SUMMARY OF RESERVES AS OF December 31, 2013 AS COMPARED TO December 31, 2012
(Forecast Prices & Costs)
----------------------------------------------------------------------------
Company Company
Gross Gross
Reserves Oil and Liquids Natural Gas
Category (Mbbls) % Change (Mmcf) % Change
----------------------------------------------------------------------------
December December December December
2013 2012 2013 2012
----------------------------------------------------------------------------
Proved developed
producing 364 854 -57% 7,646 8,575 -11%
----------------------------------------------------------------------------
Proved developed
non-producing 202 265 -24% 319 364 -12%
----------------------------------------------------------------------------
Proved
undeveloped 265 417 -36% 7,651 7,860 -3%
----------------------------------------------------------------------------
Total proved 830 1,535 -46% 15,616 16,799 -7%
----------------------------------------------------------------------------
Total probable 783 1,250 -37% 9,184 9,423 -3%
----------------------------------------------------------------------------
Total proved
plus probable 1,613 2,785 -42% 24,800 26,222 -5%
----------------------------------------------------------------------------
Total possible 924 992 -7% 5,200 4,492 +16%
----------------------------------------------------------------------------
Total proved
plus probable
plus possible 2,537 3,778 -33% 30,000 30,714 -2%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Company
Gross
Total Reserves
Reserves Category MBOE % Change
----------------------------------------------------------------------------
December 2013 December2012
----------------------------------------------------------------------------
Proved developed
producing 1,638 2,283 -28%
----------------------------------------------------------------------------
Proved developed non-
producing 255 325 -22%
----------------------------------------------------------------------------
Proved undeveloped 1,540 1,727 -11%
----------------------------------------------------------------------------
Total proved 3,433 4,334 -21%
----------------------------------------------------------------------------
Total probable 2,313 2,821 -18%
----------------------------------------------------------------------------
Total proved plus
probable 5,746 7,155 -20%
----------------------------------------------------------------------------
Total possible 1,791 1,741 +3%
----------------------------------------------------------------------------
Total proved plus
probable plus
possible 7,537 8,897 -15%
----------------------------------------------------------------------------
SUMMARY OF NET PRESENT VALUE OF FUTURE NET REVENUE
AS OF December 31, 2013
(Forecast Prices & Costs)
----------------------------------------------------------------------------
Net Present Values of Future Net Revenue Before Income Taxes
Discounted at (%/year)
----------------------------------------------------------------------------
Reserves 0% 5% 10% 15% 20%
Category M$ M$ M$ M$ M$
----------------------------------------------------------------------------
Proved developed
producing 14,376 13,519 12,770 12,110 11,524
----------------------------------------------------------------------------
Proved developed
non-producing 4,602 4,195 3,840 3,528 3,252
----------------------------------------------------------------------------
Proved
undeveloped 15,419 12,155 9,649 7,694 6,146
----------------------------------------------------------------------------
Total proved 34,396 29,870 26,259 23,331 20,921
----------------------------------------------------------------------------
Total probable 40,487 31,890 25,569 20,818 17,176
----------------------------------------------------------------------------
Total proved
plus probable 74,883 61,760 51,828 44,149 38,098
----------------------------------------------------------------------------
Total possible 39,433 28,512 21,078 15,859 12,094
----------------------------------------------------------------------------
Total proved
plus probable
plus possible 114,316 90,272 72,906 60,008 50,191
----------------------------------------------------------------------------
(1) "Possible reserves" are those additional reserves that are less certain
to be recovered than probable reserves. There is a 10% probability that
the quantities actually recovered will equal or exceed the sum of
proved plus probable plus possible reserves.
(2) The estimated net present values of future net revenues disclosed do
not represent fair market value.
Sales of oil and natural gas during the year ended December 31, 2013 were
655,788 BOE comprised of 200,053 bbls of oil and liquids and 2.734 Bcf of
natural gas.
Reserve volumes and net present values of Crown Point's reserves were impacted
by several factors. Crown Point's sales volumes for the period were 655,788 BOE
with sales revenue of $21,716,647. Crown Point did not drill any wells during
2013 as it was awaiting governmental approval for the extension of the Tierra
del Fuego ("TDF") Concessions and preparing for the commencement of drilling
operations in TDF and at Cerro de Los Leones. Technical revisions were primarily
due to depleted reservoir pressure in the south east area of El Valle resulting
in a negative revision to primary oil recovery on proved plus probable reserves
of 729,000 barrels comprised of a negative revision of 391,000 barrels of proved
reserves and of 338,000 barrels of probable reserves. Although supported by
higher commodity prices, increased operating costs at El Valle and on the TDF
Concessions, coupled with reserve revisions, impacted net present values.
Further details of the evaluation of the Company's reserves as at December 31,
2013 will be contained in the Company's NI 51-101 filings for the year ended
December 31, 2013 included in the Annual Information Form which will be filed
with Canadian securities regulatory authorities and will be made available under
the Company's profile at www.sedar.com and on the Company's website at
www.crownpointenergy.com.
OPERATIONS
TIERRA DEL FUEGO, ARGENTINA
The Company's 25.78% working interest in the TDF area of Argentina covers
approximately 489,000 acres (126,000 net acres) in the Austral Basin and
includes the Las Violetas, Angostura Sur and Rio Cullen exploitation
concessions. The primary term of all three concessions expires in November 2026.
Crown Point's TDF Concessions are high quality natural gas weighted assets
possessing the capability to deliver increased levels of production and reserves
in an expected increasing natural gas price market.
The Company signed a drilling contract with San Antonio International to provide
a drilling rig for our initial ten well drilling program in Tierra del Fuego on
February 27, 2014.
The drilling rig arrived in TDF in April with drilling operations on the Las
Violetas Exploitation Concession expected to commence in late April. The term of
the contract is one year with provisions for extending the term.
The initial ten well program on the Las Violetas Exploitation Concession will
consist of eight development wells in the Los Flamencos gas pool and two
exploration wells, one on the Puesto Quince prospect and another near the
southern San Luis natural gas pool. Site preparation and pre-drilling logistics
have largely been completed for this drilling program. All of the drilling
locations have been fully imaged with 3-D seismic. The Puesto Quince prospect
lies to the northeast of the Los Flamencos and Los Patos producing pools and is
adjacent to the Rio Chico gas pool. The feature has a seismically mapped areal
extent of approximately 50 km2. The San Luis exploration prospect has been
defined with 3-D seismic and is located on a separate fault block near the San
Luis gas pool which to date has produced approximately 32 Bcf of natural gas.
Concurrent with the commencement of drilling operations, a fracture stimulation
program will be performed on four producing wells in the Los Flamencos natural
gas pool and one well in the San Luis field. A similar program undertaken in
2010 significantly improved deliverability from five wells in the Los Flamencos
pool.
NEW GAS INCENTIVE IMPACT ON CROWN POINT
In November 2013, the Company was informed that its application for
participation in the New Gas Incentive had been rejected because the Government
of Argentina had determined that the New Gas Incentive would not apply to
companies of Crown Point's size; however on November 28, 2013 the government
announced the introduction of a new incentive program (the "Program"), designed
for companies with lower gas production rates.
The Program is similar to the New Gas Incentive in that it compensates companies
for increasing production above base production levels. The Company submitted
its application to participate in the Program on March 30, 2014. As of the date
hereof, the Company's application has not been processed and approved by the
government. Additional details of the New Gas Incentive and the Program will be
disclosed in the Company's Annual Information Form for the year ended December
31, 2013.
CERRO DE LOS LEONES, NEUQUEN BASIN, ARGENTINA
The Company's 100% interest in the Cerro de Los Leones exploration concession
covers approximately 306,646 acres in the Mendoza portion of the Neuquen Basin.
The Company has completed the interpretation of seismic and has identified two
separate structural features, La Hoyada and La Mocha.
On February 12, 2014 the Company announced that it has drilled, logged, cased
and rig released the La Hoyada x-1 exploration well as a potential Vaca Muerta
oil discovery. The La Hoyada x-1 well was drilled to a total depth of 1,953
metres and encountered persistent oil shows and gas while drilling through the
Vaca Muerta formation which consisted of 125 metres of shale and 84 metres of
imbedded fractured igneous intrusives.
Crown Point believes that the presence of the oil shows and background gas
demonstrates that the Vaca Muerta formation at Cerro de Los Leones is mature and
generating oil. Analogous wells in the area indicate that the fractured
intrusive igneous rocks in the Vaca Muerta function as conventional fractured
reservoirs sourcing oil from the surrounding Vaca Muerta shale. Interpretation
of samples and logs indicate that 36 metres of the total 84 metres of intrusives
were highly fractured and had the best live oil shows during drilling.
Similar igneous intrusives in the Mendoza portion of the Northern Neuquen basin
are recognized as significant hydrocarbon reservoirs having produced over 26
MMbbls of oil to date from areas surrounding Cerro de los Leones.
Additional secondary targets in the well include a 5 metre thick fractured
limestone layer at the bottom of the Chachao Formation and several fractured
igneous intrusives in the Agrio Formation all with oil and gas shows and full
gas chromatography.
Crown Point has sent the Vaca Muerta drilling samples for laboratory analysis to
obtain information on total organic content and thermal maturity. The Company
anticipates that it will commence completion operations on the La Hoyada well in
April 2014. If the completion is successful, the Company plans to place the well
on a production test with the potential for further drilling at Cerro de los
Leones later in 2014.
A potential analogy to the La Hoyada well is the Vega del Sol well x-1, located
4 kilometres to the northwest of La Hoyada. This well was drilled in 1995 by YPF
and encountered the Vaca Muerta 150 metres structurally lower than the La Hoyada
well. It was completed in intrusive igneous rocks penetrating the Chachao
formation and production tested at rates between 300 and 400 barrels of oil per
day. Due to problems with the well cementation program it was subsequently
suspended and abandoned by YPF.
Crown Point believes that this drilling result is confirmation of the
conventional and unconventional potential of the Vaca Muerta formation on Crown
Point's 100% interest in the 314,000 acre Cerro de Los Leones Exploration
Concession. Crown Point's geological model at Cerro de Los Leones has indicated
an area of 350km2 that could lie in the oil generation window.
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 the Golfo San
Jorge, Neuquen and Austral basins in Argentina. 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
Certain Oil and Gas Disclosures: Barrels of oil equivalent (BOE) may be
misleading, particularly if used in isolation. A boe conversion ratio of six
thousand cubic feet (6 Mcf) to one barrel (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. In addition, given that the
value ratio based on the current price of crude oil in Argentina as compared to
the current price of natural gas in Argentina is significantly different from
the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value. "MBOE" means thousands of barrels of oil
equivalent. "BOEPD" means barrels of oil equivalent per day. "Mcf" means
thousand cubic feet. "Mmcf" means million cubic feet. "Bcf" means billion cubic
feet. "Mbbls" means thousands of barrels.
Non-IFRS Measures: This press release discloses "funds flow from operations" and
"operating netbacks", which do not have standardized meanings under
International Financial Reporting Standards ("IFRS") and as such may not be
comparable with the calculation of similar measures used by other entities.
Funds flow from operations should not be considered an alternative to or more
meaningful than, cash flow from operating activities as determined in accordance
with IFRS as an indicator of the Company's performance. Management uses funds
flow from operations to analyze operating performance and considers funds flow
from operations to be a key measure as it demonstrates the Company's ability to
generate cash necessary to fund future capital investment. A reconciliation of
funds flow from operations to cash flow from operating activities is presented
in the MD&A under "Non-IFRS Measures". Operating netbacks are calculated on a
per unit basis as oil, natural gas and natural gas liquids revenues less
royalties, transportation and operating costs. Management believes this measure
is a useful supplemental measures of the Company's profitability relative to
commodity prices. See "Operating Netbacks - Total Company".
Forward looking information: Certain information set forth in this document,
including: our belief that the La Hoyada x-1 well is a potential conventional
Vaca Muerta oil well; our expectation that drilling operations will commence at
TDF in late April 2014; our belief that our interests in the TDF area possess
the capability of delivering increased levels of production and reserves in an
expected increasing natural gas price market; our expectation that drilling
operations on the Las Violetas Exploitation Concession will commence in late
April; the details of the initial ten well program on the Las Violetas
Exploitation Concession, including the type and location of wells to be drilled;
our intention to perform a fracture stimulation program on four producing wells
in the Los Flamencos natural gas pool and one well in the San Luis field, and
our expectations for results therefrom; details regarding the proposed New Gas
Incentive and Program and our intention to participate in the Program; our
belief that the presence of the oil shows and background gas in the La Hoyada
x-1 well demonstrates that the Vaca Muerta formation at Cerro de Los Leones is
mature and generating oil; our belief that analogous wells in the area indicate
that the fractured intrusive igneous rocks in the Vaca Muerta function as
conventional fractured reservoirs sourcing oil from the surrounding Vaca Muerta
shale; our views regarding additional secondary targets in the La Hoyada x-1
well; our anticipation that we will commence completion operations on the La
Hoyada well in April 2014; our plan that if the completion is successful, we
will place the well on a production test with the potential for further drilling
at Cerro de los Leones later in 2014; our belief that this drilling result is
confirmation of the conventional and unconventional potential of the Vaca Muerta
formation on our Cerro de Los Leones Exploration Concession; and our belief that
an area of 350km2 could lie in the oil generation window on the Concession; is
considered forward-looking information, and necessarily involve risks and
uncertainties, certain of which are beyond Crown Point's control.
Such risks include but are not limited to: risks associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation; 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),
expropriation/nationalization of assets, price controls on commodity prices,
inability to enforce contracts in certain circumstances, the potential for a
sovereign debt default or a hyperinflationary economic environment, and other
economic and political risks; loss of markets and other economic and industry
conditions; 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 and
ability to access sufficient capital from internal and external sources; 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.
In addition, the information relating to reserves is deemed to be
forward-looking information, as such information involves the implied
assessment, based on certain estimates and assumptions, that the reserves
described can be economically produced in the future.
With respect to forward-looking information contained herein, the Company has
made assumptions regarding: 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; 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; future oil and
natural gas prices; currency, exchange and interest rates; the regulatory
framework regarding royalties, commodity price 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 annual information form, and may be
accessed through the SEDAR website (www.sedar.com). 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.
Analogous Information: Certain information contained herein is considered
"analogous information" as defined in National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities ("NI 51-101"). Such analogous information
has not been prepared in accordance with NI 51-101 and the Canadian Oil and Gas
Evaluation Handbook and Crown Point is unable to confirm whether such estimates
have been prepared by a qualified reserves evaluator. In particular, this
presentation presents: cumulative production information for areas in close
proximity to areas in which the Company has an interest and results from a well
drilled by YPF in close proximity to the Company's La Hoyada x-1 well. Such
information is not intended to represent projections of future results. Such
information has been presented to show the presence of oil and gas resources in
areas analogous to Crown Point's areas of interest. Such information is based on
independent public data and public information received from other producers and
Crown Point has no way of verifying the accuracy of such information and cannot
determine whether the source of the information is independent. Such information
has been presented to help demonstrate the basis for Crown Point's business
plans and strategies. There is no certainty that such results will be achieved
by Crown Point and such information should not be construed as an estimate of
future reserves or resources or future production levels.
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 FURTHER INFORMATION PLEASE CONTACT:
Crown Point Energy Inc.
Murray McCartney
President & CEO
(403) 232-1150
mmccartney@crownpointenergy.com
Crown Point Energy Inc.
Arthur J.G. Madden
Vice-President & CFO
(403) 232-1150
amadden@crownpointenergy.com
Crown Point Energy Inc.
Brian J. Moss
Executive Vice-President & COO
(403) 232-1150
bmoss@crownpointenergy.com
www.crownpointenergy.com
Crown Point Energy (TSXV:CWV)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Crown Point Energy (TSXV:CWV)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
