OREANDA-NEWS. Crown Point Energy Inc. ("Crown Point" or the "Company") announced positive preliminary results for the second of two oil and gas exploration wells at its 25.78%-owned Tierra del Fuego ("TDF") concessions in Argentina.

Crown Point also provided other updates, including that its initial TDF exploration well is on production and that drilling has commenced on yet another TDF development well. Further, Crown Point provided a comment on Argentina's domestic oil and natural gas prices.

"With ongoing favourable results from our 14-well exploration, development and recompletion program at our TDF concessions, our confidence continues to strengthen regarding our outlook for TDF production growth in 2015," said Murray McCartney, CEO of Crown Point. "We are also encouraged by Argentina's relatively favourable outlook for natural gas prices and the relatively small price decline for regulated oil prices in January compared with the sharp recent fall in global oil prices."

Preliminary results from the second exploration well

Preliminary testing, together with log and sample analysis, indicates that the second TDF exploration well is a new pool discovery well with hydrocarbon saturation in the Springhill formation. However, fracture stimulation will be required to obtain definitive flow rate information. Fracture stimulation is planned for the first quarter of 2015. As the Springhill formation is a tight formation, fracture stimulation is commonly required to stimulate production. Crown Point anticipates that additional drilling on the structure will be undertaken following fracture stimulation on the discovery well.

The well, called PQ x-1001, is located approximately 5 kilometres from Company-owned gas and oil processing facilities at Rio Chico. PQ x-1001 was completed in two stages during the last 10 days in December. On December 22nd a 6.5 metre interval was perforated to test the basal portion of the Springhill formation. During the following two days the well was swabbed, recovering fluids at an average gross rate of 19.5 barrels per day comprised of a mixture of 50% oil and 50% load fluid. On December 29th, a 5.5 metre interval was perforated to test the upper portion of the Springhill formation. The well subsequently swabbed dry and was shut in for 60 hours, after which completion fluid with oil shows were recovered.

As previously disclosed, PQ x-1001 was drilled to a total depth of 1,939 metres and cased on December 8, 2014 with approximately 14 metres of gross pay in the Springhill sandstones formation. PQ x-1001 was drilled to evaluate the Springhill formation over the 50 square kilometre 3-D seismic mapped Puesto Quince structure.

First exploration well tied in and on stream

The first of the two TDF exploration wells, SL x-1003, was placed on production on December 30, 2014. Test results for this new pool discovery well were announced on December 9, 2014. SL x-1003 is approximately 2.6 kilometres from the Company-owned San Luis gas plant and has been tied in to that plant.

Update on TDF Development Drilling

LF-1029, the sixth well in an eight-well development drilling program, was spudded on January 6th and is currently being drilled. Completion is anticipated by the end of January. LF-1029 is located in the main body of the Los Flamencos gas pool.

LFE 1003, the fifth development well, has been drilled to a total depth of 2139 metres and was cased on December 31 as a potential Springhill formation gas well with approximately 7 metres of gross pay. The well is located on the eastern extension of the Los Flamencos gas field. Completion operations are currently underway with results expected later this month.

LFE 1002, the fourth development well, was tied into production in December. Test results from this well were disclosed in a news release on November 21, 2014.

Update on TDF Recompletions

As previously disclosed, the first two recompleted wells were placed in production in October 2014 after fracture stimulation. Fracture stimulations on the third and fourth wells, both suspended after encountering tight Springhill Formation sands, were unsuccessful.

Argentine Domestic Natural Gas and Oil Prices

Crown Point's price information for the fourth quarter of 2014 is still being finalized but preliminary indications appear to confirm our published expectation that revenue per BOE for the quarter was higher than the USD 30.45 per BOE earned in the fourth quarter of 2013.

Crown Point believes the long-term outlook for natural gas prices in Argentina remains favourable because, unlike North America, there is not sufficient production in Argentina to meet demand. This is especially important for Crown Point because its production is weighted approximately 80% to natural gas.

As for Argentina's government-regulated oil prices, local benchmark Medanito crude oil has been posted at USD 77 per barrel for January, down approximately 8% from USD 83.90 per barrel from May 2014 to December 2014.

Oil from Crown Point's TDF concessions, which sells at a discount to Medanito crude, will be priced at approximately USD 70 per barrel starting in January 2015, down approximately 9% from USD 77 per barrel from May 2014 to December 2014. The decline is relatively small compared with the recent sharp price slump in global crude oil markets and is not expected to have a material impact on our cash flows. The January 2015 price is approximately 40 per cent higher than the closing price on January 9, 2015 of approximately USD 50 per barrel for global benchmark Brent crude.