CALGARY, AB, Aug. 11, 2022 /CNW/ - (TSXV: CWV): Crown Point Energy Inc. ("Crown Point" or the "Company") is pleased to announce that its wholly-owned subsidiary has entered into an agreement with Petrolera Aconcagua Energía S.A. ("Aconcagua") to acquire a 50% working interest in the Puesto Pozo Cercado Oriental hydrocarbon exploitation concession (the "Concession") from Aconcagua (the "Acquisition"). Aconcagua will retain the remaining 50% working interest in the Concession and will continue to operate the Concession jointly with the Chañares Herrados concession (in which Crown Point and Aconcagua are also 50/50 working interest partners).
The Concession, which expires in August 2043, is located in the Cuyana basin in the Province of Mendoza adjacent to the Chañares Herrados concession and covers approximately 63 square kilometers. There is 2D seismic on 100% of the Concession area and 3D seismic on 80% of the Concession area.
During June 2022, the Concession produced an average of approximately 36.4 m3 per day (229 barrels per day) of crude oil from 14 producing wells. The Concession has total remaining work commitments of US$26.8 million (US$13.4 million net to Crown Point).
Crown Point will pay US$5 million for its 50% working interest in the Concession at closing, which it will fund from the proceeds of its recently completed note offering. Crown Point will also pay up to an additional US$7.53 million in quarterly installments based on a percentage of the EBITDA derived from Crown Point's interest in the Concession (the "Contingent Consideration"), provided that the Contingent Consideration will not be payable until Crown Point has recovered its initial US$5 million investment from its share of the EBITDA derived from the Concession.
The Acquisition is expected to close on or about August 16, 2022.
About Crown Point
Crown Point Energy Inc. is an international oil and gas exploration and development company headquartered in Calgary, Canada, incorporated in Canada, trading on the TSX Venture Exchange and operating in Argentina. Crown Point's exploration and development activities are focused in three producing basins in Argentina, the Austral basin in the province of Tierra del Fuego, and the Neuquén, Cuyo and Cuyana basins in the province of Mendoza. Crown Point has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a basis for future growth.
Abbreviations: "EBITDA" means earnings before interest, taxes, depreciation and amortization; "m3" means cubic meters; "2D" means two dimensional; "3D" means three dimensional; "US$" means United States dollars.
Production Rates: Any references herein to production 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. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company. Production rates may be estimated based on third party estimates or limited data available at this time. In all cases herein, production rates 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: the anticipated closing date of the Acquisition; 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 risk that closing of the Acquisition is delayed or does not occur; the risk that the Company changes its business strategies; 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 ability of the Company to obtain the financing required on acceptable terms to fund its share of future work commitments on the Concession; and the ability of the parties to satisfy the conditions to closing the Acquisition. 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.
SOURCE Crown Point Energy Inc.
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