Junior oiler Point Loma Resources Ltd (CVE:PLX) said its joint venture with Salt Bush Energy has acquired two wells and rights at its Paddle River asset in a $335,000 deal - firing the starting gun on new production from one well earmarked for next month (September).
The 12-4-56-7W5 well was drilled in 2013 but has not been produced due to past facility constraints but output is now anticipated to begin in September, said Point Loma.
The 2-4-56-7W5 well has produced 200mln cubic feet of gas and 4,000 barrels of oil in total to date and is a potential re-entry candidate into the Ostracod A pool, it added.
The firm aims to begin drilling this month with the drilling of two wells in addition to the activation of the acquired above 12-4 well.
"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, Point Loma's chief executive.
"Such consolidation acquisitions continue to add value to Point Loma while expanding our core position."
Point Loma added that it was working with the new owners of the Paddle River gas processing facility to reactivate previously suspended wells in the area.
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, the firm said.
No reserves are currently assigned to the wells pending the start of production.
The Ostracod A pool currently produces around 300 barrels of oil equivalent per day (boepd) and has cumulative production of 500,000 barrels of oil and 2.7bn cubic feet of natural gas.