CALGARY, AB–(Marketwired – November 24, 2016) – Point Loma Resources Ltd. (TSX VENTURE: PLX) (the “Corporation” or “Point Loma“) is pleased to report financial and operating results for the third quarter at September 30, 2016. Several significant accomplishments were achieved during the period:
- Point Loma was formed on June 28, 2016 through the reverse take-over of First Mountain Exploration Inc. (“First Mountain”), a publicly traded company by Point Loma Energy Ltd. (“Point Loma Energy”), a private company.
- On June 28, 2016, Point Loma Energy acquired petroleum and natural gas assets focused in the Paddle River area of Alberta for total consideration of $5.5 million. The effective date of the transaction was May 1, 2016. The consideration was paid through the issuance of $2.5 million of common shares and a $3.0 million convertible debenture. Subsequently, First Mountain acquired all the issued and outstanding shares of Point Loma Energy in exchange for common shares of First Mountain. Upon completion of the transaction, First Mountain changed its name to Point Loma Resources Ltd. The transaction resulted in Point Loma Energy shareholders owning approximately 85 percent of the issued and outstanding shares of First Mountain. As a result, this is accounted for as a reverse take-over of First Mountain by Point Loma Energy.
- Point Loma began trading on the TSXV exchange July 5, 2016.
- On July 18, 2016, Point Loma Resources and Point Loma Energy were amalgamated.
- On July 22, 2016, Point Loma sold a 2.5 percent gross overriding royalty for $1.0 million consideration. Under the terms of the agreement Point Loma has received $0.7 million of the total consideration to date. The balance is to be paid upon meeting certain production thresholds.
- Point Loma increased production from 135 boe/d at the beginning of July 2016 to over 500 boe/d at the end September 2016 through the tie-in and facility work of wells previously suspended.
|HIGHLIGHTS||Three Months ended
September 30, 2016
|($ thousands, except share amounts)|
|Cash flow from (used in) operations||(167||)|
|Per share – basic||(0.01||)|
|Per share – basic||(0.01||)|
|Working capital deficit||608|
|Weighted average shares outstanding for period||21,517,702|
|Outstanding shares at end of period||21,630,040|
|Daily average production|
|Crude oil and liquids (bbls/d)||122|
|Natural gas (mcf/d)||618|
|Total production (boe/d at 6:1)||225|
|Third quarter exit rate (boe/d)||500|
|Average sales price|
|Crude oil and liquids ($/bbl)||44.11|
|Natural gas ($/mcf)||2.38|
Third Quarter Summary
The third quarter of 2016 saw Point Loma initiate operatorship of the assets purchased in June 2016 from Madalena Energy Inc., which were largely suspended at the time.
Capital expenditures of $2.4 million were incurred during the quarter, primarily on pipelines and facilities to re-activate production in the Paddle River area. Point Loma was successful in concluding the tie-in and increase in facility capacity that will allow for first call on up to 4.0 mmcf/d of gas processing capacity at preferred rates.
Point Loma was also able to improve the productive rates of the existing wells with a series of well enhancements that allowed the Corporation to achieve an exit rate of 500 boe/d in September 2016.
On October 26, 2016, Point Loma issued 5,561,499 flow-through common shares, at $0.35 per share, for gross proceeds of $2.0 million.
Point Loma is currently executing the second phase of production activities with the tie-in of a previously standing Nordegg well in the West Cove area. The well will be connected to the same gathering system Point Loma expanded in the third quarter with the capital expenditures noted above. Once on production, the Corporation anticipates an increase in production beyond 700 boe/d. In addition, Point Loma will be working to tie-in another standing well in the Thorsby area. In 2017, Point Loma will seek to drill additional horizontal exploration and development wells on the Mannville trend of central Alberta. This drilling activity has the potential to lead to growth in production and reserves for the Corporation.
A total of 565,000 stock options have been granted to directors, officers and employees of the Corporation. Of the total granted, 465,000 stock options were granted to directors and officers of Point Loma.
Point Loma has filed its interim financial statements and related Management’s Discussion and Analysis (MD&A) for the three and nine months ended September 30, 2016 with Canadian securities regulators. These filings, and additional information including the Corporation’s recently updated corporate presentation can be found at 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.
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.