Crown Point Energy Inc. is pleased to announce that its wholly-owned subsidiary, Crown Point Energia S.A., has entered into a sale and purchase agreement (the “Agreement”) with an arm's length party (the "Seller") to acquire the Seller's 16.9972% non-operating participating interest (the "Acquired Assets") in the Rio Cullen, Las Violetas and La Angostura hydrocarbon exploitation concessions (the "TDF Concessions") located in the Tierra del Fuego region of the Austral basin in southern Argentina (the "Acquisition"). Crown Point currently holds a 34.7349% non-operating participating interest in the TDF Concessions.
The three TDF Concessions, comprising a total of 489,000 gross acres, are entirely located within Argentine territory on the southern extension of the Austral basin on the island of Tierra del Fuego. The assets are gas weighted and include Company owned infrastructure to gather, process and transport gas production to mainland and island markets. Additional details regarding the TDF Concessions are contained in Crown Point's continuous disclosure documents, including its most recently filed annual information form and Statement of Reserves Data and Other Oil and Gas Information, which can be accessed on the SEDAR+ website (www.sedarplus.ca) and on Crown Point's website (www.crownpointenergy.com).
Acquisition Highlights
This Acquisition will consolidate Crown Point's position in the TDF Concessions. The following table sets out the production volumes, sales volumes, reserves and land holdings for the Seller and Crown Point in respect of the TDF Concessions, on a stand-alone basis and on a pro forma basis:
Purchase Price and Financing
The purchase price payable by Crown Point to the Seller is US$700,000 cash (US$293,000 of which has been paid as a deposit), subject to customary closing adjustments, including for crude oil and natural gas inventories attributable to the Acquired Assets on the effective date of the Acquisition, which is July 1, 2024. Crown Point anticipates funding the purchase price using its existing cash resources, operating cash flows, and new debt financing.
Closing Conditions
Completion of the Acquisition is subject to, among other things, the receipt of all necessary regulatory, stock exchange and Provincial approvals, the waiver or expiration of applicable rights of first refusal ("ROFR"), and other customary closing conditions. Crown Point's partners in the TDF Concessions have ROFRs in connection with the Acquisition. If one or more of such partners exercises its ROFR, the Company will acquire the portion of the Acquired Assets in respect of which the ROFR has not been exercised, and the purchase price shall be adjusted accordingly. Closing is currently expected to occur in the third quarter of 2024.
