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Crown Point strikes gas at second Argentina Tierra del Fuego well

03rd July 2014

Crown Point Energy has announced that its second well of the Tierra del Fuego (TDF) drilling programme, LF-1027, has been drilled and cased as a potential natural gas well

Crown Point strikes gas at second Argentina Tierra del Fuego well
A fracture stimulation programme is expected to be performed on four producing wells in the Los Flamencos natural gas pool, and on the wells drilled during the current programme that require fracture stimulations

The well encountered approximately 16 metres of gross sand in the Springhill formation The initial completion operations of this well are expected to commence within a week.

The drilling rig is currently moving to the third location, LF-1024.

Commencing in mid-July, a fracture stimulation programme is expected to be performed on four producing wells in the Los Flamencos natural gas pool, and on the wells drilled during the current programme that require fracture stimulations.

A similar programme undertaken in 2010 significantly improved deliverability from five wells in the Los Flamencos pool.

Management expects that production additions from the drilling and fracture stimulation programme will commence in July and as a result, we expect to see rising production volumes and field sales receipts from the TDF area through to the end of the year.

The balance of the ten well programme on the Las Violetas exploitation concession in TDF will consist of six more development wells in the Los Flamencos gas pool and two exploration wells, one on the Puesto Quince prospect and another near the southern San Luis natural gas pool.

All of the drilling locations have been fully imaged with 3D seismic. The Puesto Quince prospect lies to the northeast of the Los Flamencos and Los Patos producing pools and is adjacent to the Rio Chico gas pool. The San Luis exploration prospect has been defined with 3D seismic and is located on a separate fault block near the San Luis gas pool.

Crown Point's interests in the TDF area of Argentina consist of a 25.78 per cent working interest in approximately 2,000 square kilometres pursuant to three producing exploitation concessions, which include the Rio Cullen Exploitation Concession, the La Angostura Exploitation Concession and the Las Violetas Exploitation Concession.

Financially, this is expected to have a positive impact on Crown Point's operating results as natural gas prices continue to rise in Argentina and new production may allow the company to access the benefits of the USD 7.50/MCF New Gas Subsidy Programme on incremental production levels.

Crown Point has not yet received approval for its participation in the New Gas Subsidy Programme, but does anticipate receiving such approval in the near term.

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