Crown Point Announces Operating and Financial Results for the Three and Six Months Ended June 30, 2020
CALGARY, Alberta, Aug. 18, 2020 (GLOBE NEWSWIRE) — TSX-V: CWV: Crown Point Energy Inc. (“Crown Point”, the “Company” or “we“) today announced its operating and financial results for the three and six months ended June 30, 2020.
Copies of the Company’s unaudited condensed interim consolidated financial statements and management’s discussion and analysis (“MD&A”) filings for the three and six months ended June 30, 2020 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 (“USD”) unless otherwise stated. References to “ARS” are to Argentina Pesos.In the following discussion, the three and six month periods ended June 30, 2020 may be referred to as “Q2 2020” and “the June 2020 period”, respectively, and the comparative three and six month periods ended June 30, 2019 may be referred to as “Q2 2019″ and “the June 2019 period”, respectively. Q2 2020 SUMMARYDuring Q2 2020, the Company:Reported net cash used by operating activities of $0.5 million and funds flow used by operating activities of $0.1 million;Stored all Q2 2020 oil production in inventory due to the continued closure of the Argentina-Chile border and on-going repair work at Cruz del Sur;Earned $0.9 million of natural gas sales revenue on average daily sales volumes of 775 BOE per day, down from $13.7 million of oil and natural gas revenue earned on average daily sales volumes of 3,261 BOE per day in Q2 2019 due to the disposition of a 16.83% participating interest in the Company’s Tierra del Fuego concessions in April 2019 combined with the lack of oil sales in Q2 2020;Received an average of $2.24 per mcf for natural gas compared to $4.19 per mcf for natural gas and $57.12 per bbl for oil received in Q2 2019;Reported an operating netback of $(0.05) per BOE, down from $24.46 per BOE in Q2 2019 due to the lack of oil sales in Q2 2020 and the drop in natural gas prices in Argentina combined with overall higher per BOE operating costs due to the decrease in sales volumes;Implemented procedures to reduce the variable and fixed operating costs of producing properties in the TDF Concessions which measures are expected to lead to reduced costs per BOE commencing in Q3 2020;Further reduced the 2020 capital spending budget by an additional $0.2 million for the deferral of four well workovers to 2021; andObtained $0.7 million (ARS 50 million) of short-term working capital loans.OPERATIONAL UPDATETierra del Fuego Concession (“TDF”)La Angostura ConcessionProduction from the San Martin field was shut-in on March 24, 2020 when truck deliveries to the Enap terminal located at San Gregorio, Magallanes Province, Chile were halted due to an outbreak of COVID-19 and the closure of the Argentine-Chile border. The San Martin field remained shut-in during the second quarter due to ongoing repair work by YPF at Cruz del Sur and the continued closure of the Argentina – Chile border due to the COVID-19 pandemic.The Cruz del Sur repair work was completed in early August 2020 and it is expected that the offshore loading facility will be operational in late August 2020. The Company has scheduled the export and sale of approximately 27,000 bbls of oil held in stock at Cruz del Sur before the end of August 2020.Due to the uncertainty and volatility created by COVID-19, the Company is unable to predict when the Argentina – Chile border will reopen. Prior to its shut-in, the San Martin field production for March 2020 averaged 1,600 (net 556) bbls per day of oil. Production from the field will be reactivated in September 2020 for delivery of oil to Cruz del Sur for storage and sale.Las Violetas ConcessionProduction from the Las Violetas concession remained uninterrupted during the June 2020 period. No drilling was carried out on the concession during the June 2020 period. The workover for gas well LF-1029 originally scheduled in the second half of 2020 has been deferred.Rio Cullen ConcessionProduction from the Rio Cullen concession was shut-in on March 24, 2020 due to reduced commodity prices.Cerro de Los Leones (“CLL”) Exploration Permit As at June 30, 2020, the Company is committed to drilling one exploration well on the CLL exploration permit before February 23, 2021 under the Period 3 one-year term of the permit.OUTLOOKThe Company’s capital spending for fiscal 2020 is budgeted at $0.7 million in TDF based on expenditures for the following proposed activities:Perform a workover on the SM x-1001 well in the La Angostura concession; andOther improvements to facilities in TDF.During the June 2020 period, the Company incurred $0.5 million of capital expenditures in TDF on facilities improvements and a workover on SM x-1001 which restored its water-free productivity.Four well workovers have been deferred to 2021. Investment in TDF has been significantly reduced and investment in CLL has been postponed due to a sharp decline in capital investment in Argentina as a consequence of the impact of the COVID-19 virus on both Argentina and the global economy.ARGENTINA – COVID-19 AND ECONOMIC SUMMARY