Crown Point provides operational update and announces the casing of a potential multi-zone oil well at El valle in the Golfo San Jorge Basin, Argentin
Thursday, Apr 12, 2012Crown Point Ventures Ltd. ("Crown Point" or "the Company") (TSX VENTURE:CWV) is pleased to provide this operational update and announce that the first well of the ten well 2012 drilling program on its El Valle concession in the Golfo San Jorge Basin, Argentina has been logged and cased as a potential multi-zone oil well.
El Valle - Golfo San Jorge Basin
As indicated above, the first well of Crown Point's ten well 2012 drilling program on its El Valle concession in the Golfo San Jorge Basin, Argentina has been logged and cased as a potential multi-zone oil well. Crown Point is paying 100% of the costs to drill, case, complete and equip the drilling program and will have an 80% interest in production from the wells. Logs and samples taken while drilling indicate a total of 23 net meters of potential pay in the Canadon Seco and the Mina el Carmen Formations. Later this week, the drilling rig will be moving to the EV 33 location which is the second well to be drilled in this program.
The first six to seven wells in this program will be focused on the drilling of development oil wells with multiple-zones targeted in the Canadon Seco and Caleta Olivia formations. Over the next two years the Company plans to drill a total of 24 wells at El Valle.
El Valle has three distinct productive sedimentary formations, which, in order of surface to deepest, are the Canadon Seco, Caleta Olivia and Mina el Carmen. Each of these formations may contain multiple discrete hydrocarbon bearing zones. Typically, the Canadon Seco oil produces medium grade oil (API that ranges from 16-22 degrees ), while the Caleta Olivia and Mina el Carmen produce light oil (API of approximately 30 degrees ).
The Company is also undertaking a two to four well work over program of existing producing wells at El Valle to access pay zones left behind during casing the initial completion programs. This program is expected to start at about the same time the completions of the wells currently being drilled begin.
The Company has awarded the contract for the electrification of the lower part of the El Valle field. This project is expected to be complete in a four to six month period. The benefits of the project are expected to include: the ability to install high volume progressive cavity pumps which handle entrained gas more efficiently, better operational efficiencies due to more consistent rates of production and providing power for expanded facilities which are expected to reduce operating costs. Electricity will also permit the installation of surface measuring equipment as well as down hole monitoring where deemed necessary to better evaluate production conditions and reservoir characteristics.
Canadon Ramirez - San Jorge Basin
Once the drilling of the above El Valle program is completed the Company plans to move the drilling rig to its 100% interest Canadon Ramirez concession and drill a 2-3 well development program. Canadon Ramirez is located on the northwest side of the San Jorge Basin. The wells are to be drilled on a 3-D seismically defined western extension of the Mata Magallanes Oeste Field. This pool extension had a confirming well bore drilled on it in 2008. Canadon Ramirez is immediately to the west of Mata Magallanes Oeste Field which has produced 5.4 million barrels of oil. This concession, like many areas within Argentina, has easy access to existing infrastructure allowing production from this area to have a quick cycle time to market.
Laguna De Piedra - Neuquen Basin
At Laguna de Piedra where the Company holds a 50% working interest, Crown Point plans on drilling one to two high impact exploration wells in the Neuquen Basin starting in the second half of 2012. Laguna de Piedra's primary targets are 3-D seismically defined targets focused on light oil objectives in the Punta Rosada and Quintuco sandstones. Laguna De Piedra is located in the south flank of Neuquen basin close to the Flor de Roca field and southeast of the Estacion Fernandez Oro field.
Cerro Los Leones - Neuquen Basin
A public hearing for the Cerro Los Leones environmental permit required for the Company's work plan was held on March 8, 2012 in Malargue, Mendoza. This hearing was the last part of the environmental approval process for the Company's work plan on the Cerro Los Leones area of the Neuquen Basin. We are expecting finalization of this approval within a week with the receipt of the required environmental permits. We then expect to commence the shooting of our planned 3-D and 2-D programs early in the second quarter of 2012. Drilling on various high impact conventional plays and the unconventional Vaca Muerta shale is expected to commence late in the second quarter of 2012 following interpretation and processing of the seismic data.
Initially, Crown Point plans to kick-off a two to four well drilling program targeting the Vaca Muerta formation on the western area of the concession and then drill an additional two to four vertical wells targeting the Loncoche, Neuquen group, and Huitrin formation resource type plays located on the eastern area of the concession. With multiple play types at Cerro Los Leones, Crown Point has the ability to ramp up its exploration and development programs depending on the drilling results of these initial wells.
As part of the planned drilling Crown Point plans to evaluate the unconventional Vaca Muerta shale via perforation and fracture stimulation operations on vertical wellbores initially. Following these initial prove-up operations, Crown will look to drill additional vertical and horizontal tests in the Vaca Muerta shale depending on the successful confirmation of key reservoir characteristics of the play. In a recent news release, YPF announced the drilling of a Vaca Muerta shale exploration well on the Valle de Rio Grande block which is an adjoining southern concession to Cerro de los Leones. This well was perforated and flowed 27 degree API oil from the Vaca Muerta shale prior to fracking operations.
Existing production in close proximity to Cerro Los Leones provides an understanding of the concessions exploration potential. The productive fields range from the Tertiary (Loncoche) to the Precuyo, with strong productive history in the Vaca Muerta immediately to the south of the concession in the Valle de Rio Grande oil pools. These pools have produced 89 million barrels of oil (current reported production is 5,200 barrels of oil per day), the Vaca Muerta. Other nearby fields include Llancanelo, the largest heavy oil accumulation in Argentina, as well as the Cerro Fortunoso field with current reported production of 3,250 barrels per day of oil, and Cajon de los Caballos with current reported production of 483 barrels per day of oil.
Crown Point has a very active year planned for 2012, starting with a low risk ramp up of oil production and cash flow from our operations in the San Jorge Basin. Later in the second half of 2012 Crown Point will commence the drilling of some high impact wells in Laguna de Piedra and Cerro Los Leones which have, based on production history from analogous nearby fields, the potential to deliver strong rates of production and reserves.
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