Looks good. But Crown Point has no cash to pay their share of the price. Look for more loans and capital raises.
CALGARY, Alberta, March 12, 2021 (GLOBE NEWSWIRE) -- (TSX-V:CWV) : Crown Point Energy Inc. ("Crown Point" or the "Company") is pleased to announce that the Company, together with partner Petrolera Aconcagua Energa ("Aconcagua"), has been awarded a 25 year exploitation license for the Chaares Herrados producing oil block, located in the Cuyo Basin approximately 50 kilometers south of Mendoza City, Province of Mendoza.
As previously reported, Crown Point (50% WI), and Aconcagua (50% WI) (collectively, the "Joint Venture"), participated in an auction conducted by the Province of Mendoza in 2020 to award a 25 year exploitation license covering the 40.6 square kilometer Chaares Herrados concession, On March 11, 2021 the Province issued a decree confirming that the Joint Venture had submitted the only qualifying bid, and awarding the 25 year exploitation license to the Joint Venture.
Under the terms of the license agreement, the Joint Venture will make a cash payment of US$8.3 million (US$4.15 million net to Crown Point) to the Province, pay a 13% royalty on oil production and commit to a US$85.7 million (US$42.85 million net to Crown Point) ten year work program which includes well work overs, infrastructure optimization and a multi- well drilling program.
In January 2021, Chaares Herrados produced an average of approximately 84 m3 per day (528 barrels per day) of sweet medium gravity (32-34 ° API) crude oil from sandstone and conglomerate reservoirs of the Barrancas (Jurassic) and underlying Ro Blanco (Triassic) formations, at subsurface depths ranging between 2,900 to 3,900 metres. Producing wells exhibit low declines and an average water cut of 75%. Water is handled on site and disposed of in three field injection wells. An additional 20 oil wells are shut-in waiting on maintenance. Most of these can be quickly restarted with minimal investment, which is expected to significantly increase production from the concession.
The concession is covered by 3D seismic, is easily accessible, and is close to pipeline infrastructure which delivers oil to the YPF refinery located on the southern outskirts of Mendoza City.
Chaares Herrados will be operated by Aconcagua, a private Argentine oil and gas company with an extensive and successful record in mature oil field operations. Crown Point is providing geological and geophysical support to the work program implementation.