Point Loma Resources Ltd. (TSX VENTURE: PLX) (the “Corporation” or “Point Loma“) is pleased to announce the strategic acquisition of two wells and accompanying petroleum and natural gas rights in its core Paddle River Ostracod A pool.
- Point Loma (80 percent working interest) and Salt Bush Energy Ltd. (“Salt Bush”, 20 percent working interest) have acquired two wellbores and associated rights in the Paddle River Ostracod A pool;
- The 12-4-56-7W5 well was drilled in 2013 and has not been produced due to past facility constraints in the area. Production is now anticipated to begin in September 2017.
- The 2-4-56-7W5 well has cumulative production to date of 0.2 Bcf of natural gas and 4 mstb of oil and is a potential re-entry candidate into the Ostracod A pool.
- Point Loma intends to commence drilling operations in the month of August with the drilling of 2 wells in addition to the activation of the acquired 12-4 well.
The acquisition has closed into escrow and is anticipated to close within the next 30 days subject to regulatory approvals. Total deal costs to the Point Loma/Salt Bush JV are $335,000 and the wells are pipeline connected to the Corporation’s local gathering system. No reserves are currently assigned to the wells pending the initiation of production. The wells are mapped to be in the Ostracod A pool that currently produces approximately 300 boepd and has cumulative production of 500 mstb of oil and 2.7 Bcf of natural gas.
“Point Loma is pleased to add to our core position in the Paddle River Ostracod pool. The 12-4 well should add to our area production in the near term and the lands acquired will potentially provide additional drilling opportunities as well.” said Terry Meek, President and CEO of Point Loma. “Such consolidation acquisitions continue to add value to Point Loma while expanding our core position.”
Point Loma is also working with the new owners of the Paddle River gas processing facility to re-activate previously suspended wells in the area and will provide more details once plans are finalized.
About Point Loma
Point Loma is a public oil and gas development and exploration company focused on horizontally exploiting conventional oil and gas reservoirs in west central Alberta. 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 our current 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.
A Note Regarding Forward-Looking Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws, including without limitation, statements pertaining to Point Loma’s expectations as to production and future potential production increases, as well as increases in cash flow and the timing thereof; future gas processing rates; Point Loma’s expectations as to future prices of oil and natural gas; the focus of Point Loma’s management team and go-forward strategy.
The use of any of the words “will”, “expects”, “believe”, “plans”, “potential” and similar expressions are intended to identify forward-looking statements or information. Although Point Loma believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Point Loma cannot give assurance that they will prove to be correct.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; the inability of Point Loma to bring additional production on stream or in the anticipated quantities disclosed herein; the uncertainty of estimates and projections relating to reserves, resources, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to tax laws, royalties and environmental regulations, actual production from the acquired assets may be greater or less than estimates. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide security holders with a more complete perspective on Point Loma’s future operations and such information may not be appropriate for other purposes.
The forward-looking statements and information contained in this press release are made as of the date hereof and Point Loma does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Oil and Gas Information
“BOEs” may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.