CALGARY, ALBERTA / ACCESSWIRE / June 18, 2019 / Point Loma Resources Ltd. (TSX-V: PLX) (the “Corporation” or “Point Loma“) is pleased to announce first oil production from the Corporation’s Wizard Lake Rex oil discovery and provides an operational update. Point Loma would also like to announce that it will be hosting a live webinar at 11:00am PT (2:00pm ET) on Wednesday, June 19th. Please see webinar details below.
- The Wizard Lake 16-17-48-27W4 Rex oil well was placed on production June 5, 2019.
- Current production is estimated at 275 bbls of oil per day (gross), 192 (net). Production continues to increase as the pump speed is optimized and the well continues to clean up as similar to analog wells in the area.
- Total production for Point Loma is now approximately 900 boepd and oil and ngl weighting has increased to approximately 40%.
- Point Loma has previously announced a two well farm-out with its partner Salt Bush Energy Ltd. (“Salt Bush”) to further delineate the pool with the first well planned in the summer of 2019.
Wizard Lake Rex Oil (70% WI) – Commencing First Oil Production and Horizontal Drilling Update
The Wizard Lake Rex oil discovery well has been producing for 10 days and continues to clean up with increasing oil rates as illustrated below in figure 1. Point Loma will continue to optimize the well production and seek a stabilized initial rate. The API of the oil is 18.5 and is being sold as a medium grade crude price.
As previously announced May 30, 2019, the Corporation’s partner, Salt Bush, has agreed to commence a two well farm-in program with the first delineation well to be spudded prior to August 15, 2019. A successful fully completed 2 well farm-out would result in three producing oil wells. Point Loma would be the operator with a 50% working interest in the Rex oil discovery well, a 25% BPO / 50% APO working interest in both the farm-out wells and a 50% working interest in the remaining lands. Together with Salt Bush the acreage accumulated totals 3,385 acres and provides 18 potential drilling opportunities on the pool as currently mapped. Point Loma and Salt Bush have also secured the opportunity to drill and earn an additional 720 acres in the area adding to the total opportunities.
A total of approximately $5 million of gross capital could be spent on the two well farm-out to delineate the pool at no cost to Point Loma.
In addition to proved plus probable non-producing reserves of 150 mbbl (gross) (105 mbbl net to the Corporation) the Corporation received three additional proven undeveloped and one additional probable locations booked to the pool. In total the net proven and probable reserves booked were 525 mbbl of heavy oil with a net present value discounted at 10% of $8.8 million (before income tax) to the Corporation.
This property represents a key oil discovery for Point Loma and will increase the oil production weighting for the Corporation significantly. At the current pumping rate the oil and ngl weighting for the Corporation has increased to 40%. As the well continues to clean up this could continue to increase and follow-up drilling could further move the production split to an even higher oil weighting.
The Corporation expects that the farm-out with Salt Bush will further delineate the pool with a 1400m horizontal well and a 1800m horizontal well to be completed with multi-stage fracs. This is expected to assist in the confirmation of pool size and also oil productivity and will test the application of extended reach wells for further development of the pool. With the anticipated success of the two farm-out wells Point Loma projects additional revenues and expects to demonstrate the economics of full field development.
Terry Meek, Point Loma’s President and CEO, commented: “The success from our Wizard Lake Rex oil discovery represents a key moment in the evolution of Point Loma. This increase in oil production is expected to provide higher netbacks and cash flow. The farm-out to Salt Bush is anticipated to build further oil production in the near term. This discovery is one of multiple opportunities Point Loma has identified that could lead to similar developments. We are excited to work with Salt Bush to fully develop this new discovery.”
Corporate Update Live Webinar on Wednesday, June 19th, at 11:00am PT (2:00pm ET)
Point Loma’s President & CEO, Terry Meek, will conduct a live webinar on Wednesday, June 19th, at 11:00am PT (2:00pm ET). Terry will host the Corporate Update Webinar and discuss an in-depth overview of Point Loma, Wizard Lake Rex Oil, its current operations & future milestones. The Corporation’s updated June investor presentation can be accessed at www.pointloma.ca/investor-info/corporate-presentation.
Management will be available to answer questions following the presentation on the webinar platform. Online access and dial-in numbers are as follows:
- Register here: https://bit.ly/2WPUhTD
- Your dial-in number and access code will be provided upon registration.
Point Loma would like to congratulate Thomas Love in extending his role as VP Finance and CFO of the Corporation. Mr. Love joined the Corporation in November 2018 as Interim CFO.
About Point Loma
Point Loma is a public oil and gas exploration and development company focused on conventional and unconventional oil and gas reservoirs in west-central Alberta. The Corporation controls over 150,000 net acres (230 net sections) and has a deep inventory of oil opportunities in the Mannville (Upper and Lower), Banff and Duvernay Shale formations. Point Loma’s business plan is to utilize its experience to drill, develop and acquire accretive assets with potential for horizontal multi-stage frac technology and exploit opportunities for secondary recovery. For more information and to review the Corporations latest presentation, please visit Point Loma’s website at www.pointloma.ca or Point Loma’s profile on the System for Electronic Document Analysis and Retrieval website at www.sedar.com.