OREANDA-NEWS. Crown Point Energy Inc. (“Crown Point” or the “Company”) commented today on the  removal of currency controls in Argentina, which had imposed foreign exchange restrictions on the Argentine peso (“AR$”).  Crown Point advises that it does not anticipate a negative impact on its operations and business plan in Argentina as a result of the Argentine government’s recently announced lifting of currency controls.

The following summarizes the impact of the AR$ and the United States dollar (“US$”) on the Company’s activities in Argentina.  All numbers are presented in US$ unless otherwise stated.

  • 100% of the Company’s crude oil revenues and 85% of the Company’s natural gas revenues are priced and invoiced in US$ and settled in AR$ at the time of receipt;
  • the Company estimates that 100% of its finance and current income tax expenses, 80% of its general and administrative costs, 70% of its operating costs and 20% of its capital expenditures are invoiced and settled in AR$, therefore the AR$ devaluation reduces those costs and capital expenditures when converted to US$;
  • Bonds received from the Petroleo Plus Program are protected from devaluation risk as they are denominated in US$ and settled in AR$ upon sale;
  • the Company maintains its AR$ denominated cash holdings at a minimum
  • the Company’s credit facility is AR$ denominated with a current outstanding balance of approximately AR$ 31.2 million. On December 16, 2015, prior to the lifting of the currency controls, the amount owing was approximately $3.2 million. On December 17, 2015, subsequent to the lifting of the currency controls, the estimated amount owing was approximately $2.3 million, approximately 30% less than the outstanding balance on December 16, 2015.

About Crown Point

Crown Point Energy Inc. is an international oil and gas exploration and development company headquartered in Calgary, Canada, incorporated in Canada, trading on the TSX Venture Exchange and operating in South America. Crown Point’s exploration and development activities are focused in the Neuquén and Austral basins in Argentina. Crown Point has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a basis for future growth.