Point Loma Resources Ltd. (TSX VENTURE: PLX) (the "Corporation" or "Point Loma") is pleased to report financial and operating results for the three months ended March 31, 2017. Highlights of the period and additional updates are summarized below:
First Quarter Summary
The first quarter of 2017 was an active period for acquisitions and an increasing production profile for Point Loma. The Corporation closed a smaller transaction in January 2017 ("Ascent") and a larger deal in February, 2017 ("Judy Creek") which in combination with work completed in December 2016 resulted in increased production for the quarter and an average of 830 boe/d for the month of March 2017.
Subsequent to the first quarter Point Loma has announced two additional transactions that will capitalize 2017 drilling and facilities programs and provide strategic capital partners for future growth.
Salt Bush JV
On May 23, 2017 the Corporation closed a disposition and joint venture with Salt Bush Energy Ltd. ("Salt Bush") for consideration of $4.17 million for 20% of its oil and gas assets. Salt Bush has made an additional capital commitment of $0.83 million towards the current joint budget.
Salt Bush will be a strategic JV partner with Point Loma in future endeavors and will also contribute a proportionate share of general and administrative expenses to the Corporation.
On May 24, 2017 Point Loma announced an investment agreement with Evenergy Company Limited ("Evenergy") to acquire 8,375,000 shares of Point Loma for $4,020,000 representing a purchase price of $0.48 per share. The first tranche of funds closed on May 29, 2017 in the amount of $1,797,541 and the second tranche of $2,222,458 is expected to close within 3 business days after the receipt of approvals from the TSX Venture Exchange.
Evenergy will also have the right to nominate one director to the board of directors of the Corporation and the right to participate in future equity issuances of the Corporation to maintain its pro rata interest on the terms set out in the investment agreement.
Point Loma is very pleased to have added Kevin R. Baker, Q.C., to the Corporation's Board of Directors subject to the approval of the Corporations shareholders at our upcoming Annual and General meeting. Mr. Baker is a significant shareholder of Point Loma with ownership of approximately 17% of the Corporation's common shares. Mr. Baker has been President and CEO of a number of public and private exploration and production and oilfield services companies. It is anticipated that he will join the Audit and Corporate Governance and Compensation committees of Point Loma.
With the injection of the additional capital outlined above Point Loma is planning to undertake a busy drilling and facilities program this summer. The Corporation has approved a capital budget for the second and third quarters that will see approximately $5 million of activity including the drilling of 2 horizontal development wells, one vertical exploratory test and additional facilities optimization and acquisitions. Point Loma anticipates that these activities will be the precursor to an increase in oil and gas production into the fourth quarter.
Pending success and approved capital programs Point Loma would anticipate a further program of drilling in the fourth quarter. Point Loma has been in contact with an industry midstream operator regarding their announced purchase of the Paddle River gas facility and infrastructure system. Point Loma has previously producing suspended wells in the area that could be re-activated into the facility.
"Point Loma is excited to begin our 2017 drilling and operational cycle," said Terry Meek, President and CEO of Point Loma. "The combination of additional capital, development drilling, identified tuck in opportunities and potential re-activation of key infrastructure in our core area provides the impetus for a growth step and operational improvements for Point Loma that would benefit our production levels while improving our netbacks through lower operating costs."
Point Loma has filed its first quarter financial statements, Management's Discussion and Analysis (MD&A) and Annual Information Form (AIF) for the quarter ended March 31, 2017 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 at 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 implementation of horizontal multi-stage frac technology and exploit opportunities for secondary recovery.
SOURCE: Point Loma Resources Ltd.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.