Point Loma Resources Announces Third Quarter 2019 Financial and Operating Results

CALGARY – Point Loma Resources Ltd. (TSXV:PLX) (the “Corporation” or “Point Loma“) reports its financial and operating results for the three and nine months ended September 30, 2019. Highlights of the period and additional updates are summarized below:

Q3 – 2019 Financial and Operating Results

1. Funds used in operations is cash flow used in operating activities less changes in non-cash working capital. See “Non-GAPP Measures” below. Per share amounts are calculated using the same number of weighted shares as net loss.
2. Operating netback is determined by deducting royalties, net operating expenses and transportation expenses from petroleum and natural gas revenue. See “Non-GAAP Measures” below.
3. Net operating expense is defined as operating expenses less processing fees. See “Non-GAAP Measures” below and MD&A.

Q3-2019 Activity Overview and Subsequent Activity

• Wizard Lake Update

Positive developments at Wizard Lake have occurred since the end of June 2019 resulting in the expectation that Point Loma will become cash flow positive in the first quarter of 2020. Highlights were as follows:

• The second well of a two well farm-out, Wizard Lake 13-4-48-27W4M (“WL 13-4”), has been drilled and cased to a depth of 3,673 m and is expected to be completed shortly with a frac design of approximately 45 stages, representing an increase from the fracs pumped in the two previous wells. The well encountered excellent reservoir quality over at least 1800m of the 2,098m extended length horizontal lateral. The net to gross reservoir ratio was over 90% in the lateral.
• The first well of the two well farm-out, the WL 1-8 well was successfully drilled and completed in August and has produced in a limited fashion due to facility restrictions.
• Construction operations are currently underway to expand the production facilities to be capable of handling up to 5,000 barrels of fluid a day and 5 mmcf per day of natural gas. The upgrade work is expected to be completed by the end of December and is planned to coincide with the commencement of production from all three existing wells at Wizard Lake.
• The initial discovery well, the WL 16-17, was shut-in as existing production facilities were incapable of processing production from both it and the unexpectedly prolific WL 1-8. A workover of the WL 16-17 well was successfully completed and the well is expected to resume production in December upon completion of the facilities expansion.
• A total of approximately $5 million of gross capital is expected to be spent on the two farm-out wells to delineate the pool at no cost to Point Loma.
• The Company will have a 25% WI before payout in both farm-out wells and 50% WI after payout.
• The Company’s share of the costs associated with the production facilities will be borne by its partner Salt Bush. Point Loma will have an option to back-in to a working interest in the facilities.

• The Company has been working with Mackie Research Capital Corporation to canvas the market for parties interested in a transaction to potentially acquire Point Loma’s interest in its Wizard Lake Rex oil assets. This process remains ongoing to allow engaged counterparties to assess pending results from the second farm-out well, the completion of the facilities expansion and additional production data from all three wells.
• Until such a time as an acceptable transaction for the Company’s Wizard Lake property has been secured, Point Loma remains committed to the continued delineation of the Rex oil pool and expects to begin to realize additional production revenues from the three existing wells through the expanded facilities early in 2020.
• Closed a $1.7 million private placement on September 27, 2019.
• Point Loma has been re-activating production that had remained shut in during the summer months due to low gas prices. To date, the Corporation has returned to production approximately 90 boepd (32 bpd oil) and are working on a further reactivation of approximately 150 boepd of gas weighted production. Natural gas prices have increased significantly in the recent months and could add considerably to future revenues at the current forward price projections.

Board of Directors Changes

Effective November 26, 2019 Mr. Doug Dafoe and Mr. Kevin Baker have resigned as directors of the Corporation. The board of directors and management of Point Loma thank Doug and Kevin for their many contributions to the Corporation and wish them well in future ventures.

Additional Information

Point Loma has filed its third quarter financial statements and Management’s Discussion and Analysis for the quarter ended September 30, 2019 with Canadian securities regulators. These filings and additional information can be found at Point Loma’s website at www.pointloma.ca or at Point Loma’s profile on the System for Electronic Document Analysis and Retrieval website at www.sedar.com.

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 140,000 net acres (220 net sections) and has a deep inventory of oil opportunities in the Mannville (Upper and Lower), Banff, Nordegg, and Duvernay Shale formations. Point Loma’s business plan is to utilize its experience to drill, develop and acquire accretive assets with potential to employ horizontal multi-stage frac technology and to exploit opportunities for secondary recovery. For more information, 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.