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.
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.
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