Crown Point has completed the drilling of the first of three onshore oil wells to be drilled in sequence at El Valle in the Golfo San Jorge basin of Argentina.
The EV-22 well has been logged, evaluated, and cased as a potential oil well. Logs and drilling samples have identified five separate potential hydrocarbon bearing zones in the well bore. Most significant are two zones in the Caleta Olivia. The well encountered two separate three metre showings in the Caleta Olivia which, if productive, will produce light to medium quality oil (25-30° API gravity). We anticipate that this well will be completed and be production tested in early August. The well also intersected three potentially productive zones in the Cañadon Seco formation, which if productive, will produce oil in the heavy-medium range of oil quality (16-22° API gravity) oil.
Crown Point is currently drilling the second well and anticipates that it will finish drilling next weekend. Once this well has been drilled and logged, Crown Point plans to bring in a service rig to complete the first well and to sequentially complete the two later wells, if warranted.
Funding for this program derives from the recently completed non-brokered private placement, which raised gross proceeds of approximately $4.4 million, and closed in May and early June 2010.
El Valle has three distinct productive sedimentary formations, which, in order of surface to deepest, are the Cañadon Seco, Caleta Olivia and Mina el Carmen. Each of these formations may contain multiple discrete hydrocarbon bearing zones. Typically, the Cañadon Seco oil produces medium grade oil (API gravity that ranges from 16-22°), while the Caleta Olivia and Mina el Carmen produce light oil (API gravity of ~30°).
Management estimates a time-frame of another 21 - 40 days to drill, complete, test and equip the three wells depending on the complexity of the completion program for each well.
Crown Point continues to evaluate other growth opportunities in Argentina. The successful conclusion of these would add a new dimension to Crown Point in Argentina and expand the depth, breadth and size of our operations and asset base.
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