July 17, 2019 Accesswire
CALGARY, AB / ACCESSWIRE / July 17, 2019 / Point Loma Resources Ltd. (TSX VENTURE: PLX) (the “Corporation” or “Point Loma”) is pleased to announce the retention of Mackie Research Capital Corporation (“MRCC”) to market the Corporation’s Wizard Lake Rex oil property in central Alberta.
MRCC and Point Loma have entered into an engagement agreement whereby Mackie will canvas the market for parties potentially interested in a transaction to acquire the Corporation’s interest in its Wizard Lake oil property.
Funds realized from a transaction would be utilized to address the Corporation’s working capital deficit and to advance additional oil opportunities in Point Loma’s existing inventory on its 230 net section land position.
The Wizard Lake property consists of one producing Rex oil well (initial discovery well), 3,385 acres of land (with partner Salt Bush Energy Ltd. (“Salt Bush”)) and a two well farm-out agreement in-place whereby Salt Bush would drill two wells prior to year-end 2019 resulting in a 50% WI for both parties in the property and Point Loma remaining as the operator. Both farm-out wells are to be 100% funded by Salt Bush under the terms of the farm-out agreement (see May 30, 2019 press release for details).
The Wizard Lake 16-17-48-27W4 Rex oil discovery well was placed on production June 5, 2019.
Oil production for the month of June is estimated at 4,280 bbls over a total producing period of 555 hours.
Oil cut increased throughout the period to approximately 40-50% of fluid during the final 10 days of June with current production estimated at 200-250 barrels per day of oil.
Pump rate had been restricted due to weather conditions over the final 10 days of the month.
The first horizontal farm-out well at Wizard Lake is expected to spud in late July. This is the first well of the previously announced two well farm-out program which includes plans to drill an extended reach horizontal well.
Wizard Lake Rex Oil (70% WI) -Oil Production and Horizontal Drilling Update
The Wizard Lake Rex oil discovery well has been producing since June 5, 2019 and continues to clean up with increasing oil rates as the well maintains consistent pumping conditions. Point Loma will monitor and look to increase pump rates as weather conditions improve in the area which will allow for greater fluid volumes and potentially increased oil rates. The production facility is now resulting in clean oil loads being delivered to the purchaser which is expected to significantly reduce current operating costs.
As previously announced on May 30, 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% before payout / 50% after payout working interest in both the farm-out wells and a 50% working interest in the remaining lands. Together with Salt Bush the acreage accumulated equals 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 further delineate the oil pool at no cost to the Corporation.
The Corporation expects that the farm-out with Salt Bush will further delineate the pool with a 1500m 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.
Terry Meek, Point Loma’s President and CEO, commented: “The Corporation is pleased to be working with Mackie Research Capital to assist us in realizing the value of the Wizard Lake oil property. The drilling of the two farm-out wells, starting later in July, continues the development of the Rex oil pool and is anticipated to increase the overall value of the asset.”
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.