Mr. Gabriel Obrador reports

CROWN POINT ANNOUNCES OPERATING AND FINANCIAL RESULTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2023

Crown Point Energy Inc. has released its financial and operating results for the three months and year ended Dec. 31, 2023.

Selected information is outlined below and should be read in conjunction with the company's Dec. 31, 2023, audited consolidated financial statements and management's discussion and analysis (MD&A) that are being filed with Canadian securities regulatory authorities and will be made available under the company's profile on SEDAR+ and on the company's website. All dollar figures are expressed in United States dollars unless otherwise stated.

In the following discussion, the three months and the year ended Dec. 31, 2023, may be referred to as Q4 2023 and 2023, respectively. The comparative three months and year ended Dec. 31, 2022, may be referred to as Q4 2022 and 2022, respectively.

Q4 2023 summary

During Q4 2023, the company:

• Reported net cash provided by operating activities of $1.3-million and funds flow provided by operating activities of $2.1-million as compared with Q4 2022 when the company reported $200,000 of net cash provided by operating activities and $100,000 of funds flow provided by operating activities;
• Earned $5.5-million of oil and natural gas sales revenue on total average daily sales volumes of 1,275 BOE (barrels of oil equivalent) per day, lower than $8.6-million of oil and natural gas sales revenue earned on total average daily sales volumes of 1,737 BOE per day in Q4 2022 due to lower gas sales volumes in TDF concessions in Q4 2023 combined with lower oil sales in both the TDF concessions and the Mendoza concessions;
• Received an average of $4.47 per mcf for natural gas and $57.70 per bbl for oil compared to $4.23 per mcf (million cubic feet) for natural gas and $67.11 per bbl for oil received in Q4 2022;
• Reported an operating netback of $9.27 per BOE, down from $10.29 per BOE in Q4 2022;
• Obtained and repaid $4.2-million and $3.6-million of working capital and overdraft loans, respectively, and issued an additional $6-million principal amount of unsecured fixed-rate Series IV notes for $6.74-million cash consideration;
• Reported a loss before taxes of $2.4-million and a net loss of $2.1-million as compared with Q4 2022 when the company reported a loss before taxes of $3.9-million and a net loss of $2.7-million;
• Reported a working capital deficit2 of $11.8-million.

Subsequent events

Subsequent to Dec. 31, 2023, the company:

• Obtained three export financing loans for a total amount of $630,000 and repaid $260,000 on working capital and export financing loans;
• Repaid the first $2.1-million installment on the Series III notes;
• As disclosed by press release issued on Feb. 9, 2024, the company entered into an agreement with a seller to acquire a 100-per-cent working interest in the Piedra Clavada and Koluel Kaike hydrocarbon exploitation concessions. The purchase price comprises $12-million cash, subject to closing adjustments, plus contingent in-kind consideration payable over a 15-year period from the closing date whereby the company will deliver to the seller a monthly quantity of oil produced from the Santa Cruz concessions ranging from zero to 600 barrels of oil per day, subject to the market price of oil determined for each month. On Feb. 7, 2024, the company made a $2.4-million advance payment to the seller. Completion of the acquisition is subject to the receipt of all necessary regulatory and provincial approvals, including the approval of the TSX Venture Exchange and other customary closing conditions. The effective date of the acquisition will be Jan. 1, 2024.
• The company's common shares have been halted by the TSX Venture Exchange until the company has provided the TSX Venture Exchange with applicable documentation, including a reserve report in respect of the Santa Cruz concessions that is prepared by an independent third party and complies with National Instrument 51-101. The company is currently in the process of having the reserves report prepared, obtaining the approval of the province of Santa Cruz, and arranging the necessary financing to fund the balance of the cash portion of the purchase price. The acquisition is expected to close in April, 2024.

Operational update

Tierra del Fuego concession (TDF):

• During Q4 2023, San Martin oil production averaged 424 (net 147) bbl of oil per day and natural gas production from the Las Violetas concession averaged 9,568 (net 3,323) mcf per day and oil production averaged 261 (net 91) bbl of oil per day.

Mendoza concessions:

• During Q4 2023, several wells stopped producing due to mechanical failures. The UTE carried out workovers on 10 oil wells in the Chanares Herrados concession (CH concession) and on one oil well and one water disposal well the Puesto Pozo Cercado Oriental concession (PPCO concession). Oil production for Q4 2023 averaged 868 (net 434) bbl of oil per day from the CH concession and 169 (net 85) bbls of oil per day from the PPCO concession.

Cerro de Los Leones evaluation permit (CLL):

• The company is in conversations with the province of Mendoza for the extension of the CLL permit or other alternatives for the CLL permit, including the potential compensation of the company's only outstanding commitment, consisting of a well repair, with working units performed by the company in excess of what was otherwise required during the exploration period of the CLL permit.

Outlook

• The company's capital spending on developed and producing assets for fiscal 2024 is budgeted at approximately $13.4-million of which $1.5-million is for a well workover and improvements to facilities in the TDF concessions and $11.9-million is for drilling three vertical wells, well workovers, and facilities improvements and optimization in the Mendoza concessions. The company also plans to spend $500,000 on the testing of the gas bearing sandstone layers of the Neuquen group at CLL.

About Crown Point Energy Inc.

Crown Point Energy 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 Argentina. Crown Point's exploration and development activities are focused in three producing basins in Argentina, the Austral basin in the province of Tierra del Fuego, and the Neuquen and Cuyo (or Cuyana) basins in the province of Mendoza.

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