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Point Loma Resources eyeing operations as outlines busy first quarter

Last updated: 06:32 31 May 2017 AEST, First published: 00:24 31 May 2017 AEST

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Point Loma is looking forward to a busy year ahead

Oil producer Point Loma Resources Ltd (CVE:PLX) outlined a busy first quarter, which was characterised by acquisitions and a rising production profile.

Two transactions closed in January and February  on top of work in December, which resulted in increased production for the three months and an average of 830 barrels of oil equivalent per day for March, it said.

Meanwhile, on May 23, 2017, Point Loma closed the disposal and joint venture deal with Salt Bush Energy for $4.17mln for 20% of its oil and gas assets.

A strategic investment..

The next day, PLX announced a strategic investment from Evenergy to acquire 8.375mln shares of Point Loma for $4.02mln, representing a purchase price of 48 cents a share.

Gross revenue for the quarter was $1,515 (quarter to end December, 2016: $970), while the net loss fell to $772, narrowed from  a loss of $2,522 in the preceding quarter.

"With the injection of the additional capital outlined above Point Loma is planning to undertake a busy drilling and facilities program this summer," said Terry Meek, chief executive.

"The corporation has approved a capital budget for the second and third quarters that will see approximately $5-million of activity including the drilling of two horizontal development wells, one vertical exploratory test, and additional facilities optimization and acquisitions. Point Loma anticipates that these activities will be the precursor to an increase in oil and gas production into the fourth quarter.

The Paddle River gas facility...

"Pending success and approved capital programs Point Loma would anticipate a further program of drilling in the fourth quarter. Point Loma has been in contact with an industry mid-stream operator regarding their announced purchase of the Paddle River gas facility and infrastructure system.

"Point Loma has previously producing suspended wells in the area that could be reactivated into the facility.

He concluded: "The combination of additional capital, development drilling, identified tuck-in opportunities and potential reactivation of key infrastructure in our core area provides the impetus for a growth step and operational improvements for Point Loma that would benefit our production levels while improving our netbacks through lower operating costs."

Shares are unchanged at 48 cents each.

Broker Mackie repeated a ‘buy’ recommendation and $1.10 target price.

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