Crown Point Energy Inc. (TSX-V: CWV) (“Crown Point” or the “Company”) is pleased to announce that its wholly-owned subsidiary, Crown Point Energia S.A., has entered into agreements (the “Acquisition Agreements”) with Tecpetrol S.A. (“Tecpetrol”) dated June 4, 2025, YPF S.A (“YPF”) dated June 4, 2025 and Pampa Energía S.A. (“Pampa”, and collectively, the “Sellers”) dated June 3, 2025, each of which is an arm’s length party, to acquire all of the Sellers’ right, title and interest in the El Tordillo, La Tapera and Puesto Quiroga hydrocarbons exploitation concessions (the “Chubut Concessions”) and certain related infrastructure.
Acquired Assets
The Company will acquire from the Sellers a 95% operated interest in the Chubut Concessions, which are located in the Chubut Province on the northern flank of the Golfo San Jorge basin approximately 40 km west of Comodoro Rivadavia.
This acquisition represents an excellent opportunity for the Company to acquire a 95% operated interest in producing crude oil assets in Argentina with an average daily production level of approximately 5,449 boe/d during the four-month period ended April 30, 2025, comprised of 4,252 bbl/d of light and medium crude oil and 7,179 mcf/d of natural gas.
The Chubut Concessions, comprising a total of 113,325 acres, include Company owned pipeline and other infrastructure. In addition, Crown Point will also acquire 4.2% of the issued and outstanding shares of Terminales Marítimas Patagónicas S.A. (“TerMaP S.A.”), which operates an offshore loading facility through which crude oil from the Chubut Concessions is transported for sale to the domestic or export markets.
The base purchase price payable by Crown Point to the Sellers is approximately US$57.9 million in cash, subject to customary closing adjustments, plus contingent consideration of up to US$3.5 million in cash. The contingent consideration is payable to Pampa following the closing date based on monthly average natural gas sales at Pampa’s working interest up to 1,000 mcf/d, multiplied by the days in the month multiplied by US$2.80 mmBTU, with payments continuing until the earlier of the expiration of Pampa’s working interest in the Chubut Concessions and total payments aggregating US$3.5 million.
(1) The primary term of the Chubut Concessions expires in 2027, following which: (i) Pampa’s interests in the Chubut Concessions expire; (ii) Tecpetrol’s interests in the Chubut Concessions increases to 69.1053% and the term of the concessions is extended until 2047; and (iii) YPF’s interests in the Chubut Concessions increases to 9.5387% and the term of the concessions is extended until 2047.
(2) Crown Point will also pay US$300,000 to a third party to acquire the right to purchase Pampa’s interests in the Chubut Concessions from Pampa.
Crown Point intends to fund the purchase price using operating cash flows and by completing one or more debt and/or equity financings prior to closing of the acquisitions.
Acquisition Agreements
Completion of the acquisitions is subject to, among other things, the receipt of all necessary regulatory and Provincial approvals, including the approval of the TSX Venture Exchange (“TSXV”), and other customary closing conditions. Completion of the acquisitions is not subject to approval by the Company’s shareholders. The acquisition of assets from Pampa is expected to close in June 2025 and the effective date of the acquisition will be the same as the closing date. The acquisition of assets from Tecpetrol and YPF is expected to close in the third quarter of 2025 and will have an effective date of December 1, 2024. There are no finder’s fees payable by Crown Point in connection with the acquisitions.
On June 5, 2025, the common shares of the Company (the “Common Shares”) were halted pending review of the Acquisition Agreements pursuant to TSXV Policy 5.3 – Acquisitions and Dispositions of Non-Cash Assets (“Policy 5.3”) as the matters contemplated by the Acquisition Agreements are considered to be “Reviewable Transactions” under Policy 5.3. Trading of the Common Shares will remain halted pending receipt by the TSXV of acceptable documentation pursuant to Policy 5.3.
