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Point Loma set to boost output with $5mln new joint venture deal

Monday, April 10, 2017 7:43
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(Before It's News)

Oil producer Point Loma Resources (CVE:PLX) has sold a 20% working interest (WI) in its Alberta assets for $5mln and formed a joint venture, which will boost crude output and help it seek new opportunities.

The deal is with the Canadian subsidiary of Transerv Energy Ltd, a group instrumental in the initial stages of Point Loma’s predecessor companies, the firm revealed.

Salt Bush Energy will pay Point Loma $1.5 million by April 17 this year and the remaining balance of $3.5mln upon closing.

The funds will be used for drilling, facility improvements to reactivate production and certain producing property acquisitions, it said.

Initial capital expenditures are expected to result in appreciation in Point Loma production and associated net revenues.

After a highly accretive acquisition in March this year, Point Loma said another 450 boepd (barrel of oil equivalent per day) of behind pipe volumes was expected to be on production this summer.

Today, it said current production of around 900 boepd was expected to increase with the proceeds from this latest deal through certain identified acquisitions, development drilling and new pool drilling opportunities.

This deal, it told investors, will allow it to accelerate currently identified opportunities and additional capital options to pursue opportunities in its core area of west central Alberta.

“Point Loma has been able to acquire certain assets for accretive terms in the region and this transaction will inject capital to activate additional acquired production previously suspended and to expand the corporation’s drilling program,” it said in a regulatory statement.

Following closing, expected before June 9, Point Loma will hold 80% WI of the venture and Salt Bush 20%.


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