Crown Point Ventures Ltd., Calgary, having completed the acquisition of Antrim Argentina SA's Argentine assets, said combined sales are now 1,759 b/d of oil equivalent, 35% oil and liquids.
Management expects production increases from a fracture stimulation program of five wells on the Las Violetas concession since the end of the first quarter. A six-well drilling program is planned in this year’s second half.
On the El Valle concession, Crown Point is in the midst of a seven-well program with one well completed and ready to go on production, a second well under completion, and a third well cased as an oil well.
Until recently, sales of oil and gas from Tierra del Fuego to the Argentina mainland generated value-added tax of 21% that Antrim Argentina was able to retain due to favorable tax laws. Antrim reported VAT income of $2.2 million (US) in 2011 and $2.1 million in 2010. However, on May 16 Argentina issued a decree removing the province's tax-free status.
In the short to medium term, Crown Point said, the change is expected to have a modestly negative impact on the combined company's income but not on its reserves.
The policy change's impact on Crown Point may be mitigated to some degree by ongoing local efforts to have it reversed or revised, potential reductions in the conditions and terms of the concession extensions currently being negotiated with the Tierra del Fuego government, the continuation of the trend in rising natural gas prices in Argentina, and-or an increase in the proportion of Crown Point's production that is derived from natural gas production from the TDF assets, which attracts the higher Gas Plus pricing.
