Crown Point Energy Inc. (TSX-V:CWV) ("
Crown Point"
or the "
Company") is pleased to announce that its
wholly-owned subsidiary, Crown Point Energia S.A., has entered into
a sale and purchase agreement (the “
Agreement”)
with an arm's length party (the "
Seller") to
acquire the Seller's 16.9972% non-operating participating interest
(the "
Acquired Assets") in the Rio Cullen, Las
Violetas and La Angostura hydrocarbon exploitation concessions (the
"
TDF Concessions") located in the Tierra del Fuego
region of the Austral basin in southern Argentina (the
"
Acquisition"). Crown Point currently holds a
34.7349% non-operating participating interest in the TDF
Concessions.
The three TDF Concessions, comprising a total of
489,000 gross acres, are entirely located within Argentine
territory on the southern extension of the Austral basin on the
island of Tierra del Fuego. The assets are gas weighted and include
Company owned infrastructure to gather, process and transport gas
production to mainland and island markets. Additional details
regarding the TDF Concessions are contained in Crown Point's
continuous disclosure documents, including its most recently filed
annual information form and Statement of Reserves Data and Other
Oil and Gas Information, which can be accessed on the SEDAR+
website (www.sedarplus.ca) and on Crown Point's website
(www.crownpointenergy.com).
Acquisition Highlights
This Acquisition will consolidate Crown Point's
position in the TDF Concessions. The following table sets out the
production volumes, sales volumes, reserves and land holdings for
the Seller and Crown Point in respect of the TDF Concessions, on a
stand-alone basis and on a pro forma basis:
TDF Concessions |
Seller |
Crown Point |
Pro Forma |
|
|
|
|
Participating Interest |
16.9972% |
34.7349% |
51.7321% |
|
|
|
|
Production (Q2 2024(1)) (boe/d) |
353 |
721 |
1,074 |
|
|
|
|
Sales (Q2 2024(2)) (boe/d) |
398 |
813 |
1,211 |
|
|
|
|
Reserves(3) (Mboe) |
|
|
|
Total Proved |
316(4) |
646(5) |
962 |
Proved Plus Probable |
900(4) |
1,840(5) |
2,740 |
|
|
|
|
Net acres |
83,116 |
169,854 |
252,970 |
Notes:
(1) Average daily
production volumes are for the quarter ended June 30, 2024,
weighted approximately 32% to crude oil and natural gas liquids and
approximately 68% to natural gas.(2) Average daily sales volumes
are for the quarter ended June 30, 2024.(3) Reserves are "gross
reserves", being working interest share of reserves before the
deduction of royalties owned by others and without including
royalty interests.(4) The reserves volume estimates for the Seller
are based on the Company's internal evaluation as at December 31,
2023 and were prepared by a qualified reserves evaluator who is a
member of management of Crown Point in accordance with National
Instrument 51-101 and the Canadian Oil and Gas Evaluation Handbook.
Given that the Seller's participating interest in the TDF
Concessions is approximately half the size of Crown Point's
participating interest in the TDF Concessions, the reserves volumes
attributable to the Acquired Assets were considered to be
approximately half the size of Crown Point's reserves volumes
attributable to the TDF Concessions as at December 31, 2023. (5)
Crown Point's reserves volumes were evaluated by Sproule Associates
Limited as at December 31, 2023 in accordance with National
Instrument 51-101 and the Canadian Oil and Gas Evaluation
Handbook.
Purchase Price and
Financing
The purchase price payable by Crown Point to the
Seller is US$700,000 cash (US$293,000 of which has been paid as a
deposit), subject to customary closing adjustments, including for
crude oil and natural gas inventories attributable to the Acquired
Assets on the effective date of the Acquisition, which is July 1,
2024. Crown Point anticipates funding the purchase price using its
existing cash resources, operating cash flows, and new debt
financing.
Closing Conditions
Completion of the Acquisition is subject to,
among other things, the receipt of all necessary regulatory, stock
exchange and Provincial approvals, the waiver or expiration of
applicable rights of first refusal ("ROFR"), and
other customary closing conditions. Crown Point's partners in the
TDF Concessions have ROFRs in connection with the Acquisition. If
one or more of such partners exercises its ROFR, the Company will
acquire the portion of the Acquired Assets in respect of which the
ROFR has not been exercised, and the purchase price shall be
adjusted accordingly. Closing is currently expected to occur in the
third quarter of 2024.
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 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 Cuyano
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.
Advisories
Forward-Looking StatementsCertain information
regarding Crown Point set forth in this document, including all
details regarding the proposed Acquisition, the benefits that we
anticipate deriving from the Acquisition, the anticipated timing
for closing the Acquisition, our beliefs regarding how we will fund
the purchase price for the Acquisition and our ability to fund the
purchase price for the Acquisition, including our ability to obtain
the requisite debt financing, may constitute forward-looking
statements under applicable securities laws. The forward-looking
information is based on certain key expectations and assumptions
made by Crown Point, including expectations and assumptions
concerning: prevailing commodity prices and exchange rates;
applicable royalty rates and tax laws; future well production rates
and reserve volumes; the timing of receipt of regulatory approvals;
the performance of existing wells; the success obtained in drilling
new wells; the sufficiency of budgeted capital expenditures in
carrying out planned activities; and the availability and cost of
labour and services. Although Crown Point believes that the
expectations and assumptions on which such forward-looking
information is based are reasonable, undue reliance should not be
placed on the forward-looking information because Crown Point can
give no assurances that they will prove to be correct. Since
forward-looking information addresses future events and conditions,
by its very nature it involves inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These risks
include, without limitation: risks associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation, loss of markets, volatility of commodity prices,
environmental risks, inability to obtain drilling rigs or other
services, capital expenditure costs, including drilling, completion
and facility costs, unexpected decline rates in wells, wells not
performing as expected, delays resulting from labour unrest, delays
resulting from our inability to obtain required regulatory
approvals and ability to access sufficient capital from internal
and external sources, the impact of general economic conditions in
Canada, Argentina, the United States and overseas, industry
conditions, changes in laws and regulations (including the adoption
of new environmental laws and regulations) and changes in how they
are interpreted and enforced, increased competition, the lack of
availability of qualified personnel or management, fluctuations in
foreign exchange, interest rates and inflation rates, and stock
market volatility and market valuations of companies with respect
to announced transactions and the final valuations thereof. There
are also risks inherent in the nature of the proposed Acquisition,
including failure to realize anticipated opportunities and
benefits; risks regarding the integration of the Acquired Assets
into Crown Point; incorrect assessment by Crown Point of the value
of the Acquired Assets; failure to obtain the required regulatory
and other third party approvals; failure to obtain the debt and/or
other financing required to fund the purchase price for the
Acquisition; the possibility that one or more of Crown Point's
partners exercise its ROFR; and the possibility that the Agreement
will be amended or terminated. Readers are cautioned that the
foregoing list of factors is not exhaustive.
This press release also contains forward-looking
information concerning the anticipated completion of the
Acquisition and the anticipated timing thereof. Crown Point has
provided this information in reliance on certain assumptions that
it believes are reasonable, including assumptions as to the timing
of receipt of the necessary regulatory, stock exchange and other
approvals and the satisfaction of and time necessary to satisfy the
conditions to the closing of the Acquisition. These dates may
change for a number of reasons, including the inability to secure
necessary regulatory, stock exchange or other approvals in the time
assumed, the exercise by one or more of Crown Point's partners of
its ROFR, or the need for additional time to satisfy the conditions
to the completion of the Acquisition. In addition, there are no
assurances the Acquisition will be completed on the terms disclosed
herein or at all. Accordingly, readers should not place undue
reliance on the forward-looking information contained in this press
release concerning the Acquisition.
Crown Point's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what benefits that the Company will derive therefrom.
Additional information on these and other factors that could affect
Crown Point’s operations and financial results are included in
reports on file with Canadian securities regulatory authorities and
may be accessed through the SEDAR+ website (www.sedarplus.ca) or
Crown Point’s website (www.crownpointenergy.com). The
forward-looking statements contained in this document are made as
at the date of this news release and Crown Point does not undertake
any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable
securities laws.
Reserves Disclosure"Proved reserves" are those
reserves that can be estimated with a high degree of certainty to
be recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves. "Probable
reserves" are those additional reserves that are less certain to be
recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than
the sum of the estimated proved plus probable reserves.
"boe/d" means barrels of oil equivalent per day.
"Mboe" means thousand barrels of oil equivalent. Barrels of oil
equivalent (boes) may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 thousand cubic feet (Mcf) to
1 barrel 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.
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.
Gabriel Obrador
President & CEO
Ph: (403) 232-1150
Crown Point Energy Inc.
gobrador@crownpointenergy.com
Marisa Tormakh
Vice-President, Finance & CFO
Ph: (403) 232-1150
Crown Point Energy Inc.
mtormakh@crownpointenergy.com
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