Point Loma Resources Ltd. (TSX.V:PLX) (the “Corporation” or “Point Loma”) is pleased to announce production test results for the Wizard Lake HZ 1-8-48-27W4 Rex oil pool delineation well.
- Test rate for the Rex horizontal oil well over the last 24 hours of the test period to 3pm September 4, 2019 was approximately 350 barrels of 18.5 API oil per day (bopd) and 700 barrels of oil equivalent per day (boe/d) (Figure 1).
- The well was the first of a two well farm-out at Wizard Lake where Salt Bush Energy Ltd. (“Salt Bush”) will incur 100% of the costs to drill, complete and equip up to two wells – see May 29, 2019 press release. Point Loma’s working interest in the delineation well will be 25% before payout and 60% after payout.
- Figure 1 below illustrates the generally increasing production rates during the test period. It was determined that commercial production has been established. The well will be tied-in to existing temporary facilities and is expected to be placed on production as soon as possible. The well recovered approximately 41% of the load fluid during the test to date and recovered 8,252 barrels of fluid of which 817 barrels were oil.
- Salt Bush is required to elect to drill an additional well prior to December 31, 2019 (at no cost to Point Loma) to fulfill the farm-out and when completed Point Loma and Salt Bush will each have 50% working interest in the farm-out lands. Point Loma and Salt Bush control 3,385 acres in the area.
- The second farm-out well on this evolving Rex oil pool is to be an extended reach horizontal with a longer horizontal lateral length than the Wizard Lake HZ 1-8-48-27W4 well. Based on offsetting area activity in the Rex oil play, the utilization of extended reach horizontal technology has led to higher oil production rates and larger reserve bookings per well than those wells with standard horizontal lateral lengths.
Figure 1 – test results to 3:00 pm September 4, 2019
From August 29, 2019 until September 4, 2019 the well was pumped and flowed continuously with rates varying at times as illustrated in Figure 1 above. The well displayed excellent inflow with total fluid rates averaging 1,400 bpd during the testing period. During the test period 8,252 barrels of fluid were recovered of which 817 barrels were oil. Oil cuts were trending upward through the continuous flow period and were approximately 45% at the end of the test period. On a boe basis the well averaged approximately 700 boepd during the final 24 hours of the test (50% oil).
The final test rate exceeds that of the initial 16-17 discovery well and further delineates the Wizard Lake Rex oil pool.
“This delineation well extends a top tier oil pool that is expected to further increase the oil component of our production base, enhance the Corporation’s oil reserves and strategically position Point Loma as the Rex oil play continues to evolve in the area and across Point Loma’s large land position.” said Terry Meek, President and CEO of Point Loma. “Point Loma is excited to announce these results and looks forward to unlocking the value of this significant oil property for its shareholders.”
Next steps to advance the Rex oil pool will be to place the new well on production to existing facilities. Current landholdings of the Corporation support the potential for 16-20 (gross) additional drilling opportunities based on internal mapping and projected well spacing.
Further to the Corporation’s press release dated July 17, 2019, Point Loma has retained Mackie Research Capital Corporation and will be reviewing proposals to purchase its interest in the Wizard Lake oil property.
Point Loma maintains an extensive inventory of additional opportunities identified through analysis of historical penetrations that are indicative of bypassed oil pay on its lands. A description of the Corporation’s other top tier opportunities can be found in the corporate presentation on the Point Loma website at www.pointloma.ca.
About Point Loma
Point Loma is a public oil and gas exploration and development company focused on conventional and unconventional oil and gas reservoirs in west central Alberta. The Corporation controls over 140,000 net acres (220 net sections) and has a deep inventory of oil opportunities in the Mannville (Upper and Lower), Banff, Nordegg, and Duvernay Shale formations. Point Loma’s business plan is to utilize its experience to drill, develop and acquire accretive assets with potential to employ horizontal multi-stage frac technology and to exploit opportunities for secondary recovery. For more information, 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.