Proactive Investors - Run By Investors For Investors

Point Loma Resources eyes further increases in production as initial output from Wizard Lake comes onstream

The Wizard Lake 16-17-48-27W4 Rex oil well has now been producing for 10 days
Nodding donkey
Total output for the company as a whole is now around 900 boepd, it said

Point Loma Resources Ltd (CVE:PLX) told investors it is eyeing higher netbacks and cash flow as it updated on operations at its Wizard Lake Rex oil discovery in Alberta.

The Wizard Lake 16-17-48-27W4 Rex oil well has now been producing for ten days (since June 5) and current output is estimated at 275 barrels of oil per day (gross), 192 (net), the company said in a statement.

Production continues to increase as the pump speed is optimized and the well continues to clean up, it added.

READ: Point Loma announces new option with partner Salt Bush Energy to further delineate Wizard Lake Rex oil discovery

Total output for the company as a whole is now around 900 boepd (barrels of oil equivalent per day) and oil and ngl (natural gas liquids) weighting has increased to 40%.

As reported on May 30 this year, the firm's partner at Wizard Lake, Salt Bush, has agreed to a two-well farm-in to fund drilling and setup costs, with the first delineation well to be spudded before August 15 this year. In all, around C$5 million could be spent on the two well farm-out at no cost to Point Loma.

A successful two well farm-out would result in three producing oil wells. Point Loma would be the operator with a 50% working interest. In addition, the oiler would have a 25% before payout and 50% after payout working interest in both the test well and earning well. It will also have a 50% working interest in the remaining lands.

Drilling opportunities

Together with Salt Bush, the acreage accumulated totals 3,385 acres and provides 18 potential drilling opportunities. Notably, the two companies have also secured the opportunity to drill and earn an additional 720 acres in the area.

In total at Wizard Lake,  the net proven and probable reserves booked were 525 mbbl  (thousand  barrels) of heavy oil with a net present value discounted at 10% of $8.8 million before taxes to Point Loma.

"The success from our Wizard Lake Rex oil discovery represents a key moment in the evolution of Point Loma," said Terry Meek, Point Loma's chief executive. "This increase in oil production is expected to provide higher netbacks and cash flow. The farm-out to Salt Bush is anticipated to build further oil production in the near term. This discovery is one of multiple opportunities Point Loma has identified that could lead to similar developments. We are excited to work with Salt Bush to fully develop this new discovery."

Also today, the firm said CEO Meek will host a corporate update webinar and discuss an in-depth overview of Point Loma, Wizard Lake Rex Oil, its current operations  and future milestones on June 19 at 2pm Eastern.

Shares in Toronto were unchanged at $0.17.

Contact Giles at [email protected]

Follow him on Twitter@Gile74

View full PLX profile View Profile

Point Loma Resources Timeline

Related Articles

Pumpjack
June 26 2019
The oiler acquired over 6,500 acres during the downturn in the oil and gas sector between 2015 and 2018
China
April 18 2019
China asset GGZ will be spun off in 2020 as a dividend in specie
oil and gas operations
July 20 2018
“To open up the well and have clean oil come to surface with no water meant the Gatwick Gusher gushed again – a lot earlier than we thought,” Lenigas said in exclusive interview with Proactive Investors’ Andrew Scott.

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use