SOURCE: Point Loma Resources Ltd

Point Loma Resources Ltd

May 23, 2017 08:00 ET

Point Loma Resources Announces Closing of Joint Venture Funding Deal

CALGARY, AB--(Marketwired - May 23, 2017) - Point Loma Resources Ltd. (TSX VENTURE: PLX) (the "Corporation" or "Point Loma") is pleased to announce the closing of the previously announced disposition ("Disposition") and joint venture ("JV") with Transerv Energy Ltd. (ASX: TSV) via its Canadian subsidiary Salt Bush Energy Ltd. ("Salt Bush"). Highlights of the transaction are summarized below:

Point Loma Salt Bush Joint Venture

  • The Disposition consists of Point Loma selling and assigning a 20 percent working interest in its assets to Salt Bush for consideration of $4.17 million cash and $0.83 million additional capital commitment and the creation of a strategic JV;
  • Point Loma and Salt Bush will proceed forward on the basis of a working interest relationship of 80 percent Point Loma and 20 percent Salt Bush;
  • An initial capital budget of $5 million through the third quarter of 2017 will be allocated to the drilling of development wells and construction of facilities that will optimize field operating and activate additional production and target area acquisitions;
  • The initial capital expenditures are anticipated to result in an appreciation of Point Loma production and associated net revenues;
  • Under the JV agreement, Salt Bush will contribute a proportionate share of Point Loma general and administrative expenses; and
  • Point Loma and Salt Bush will become strategic partners in further oil and gas ventures.

In establishing this JV, Point Loma has attracted a strategic partner that will allow Point Loma to accelerate currently identified opportunities and additional capital options to pursue opportunities in the core focus 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.

"Point Loma is looking forward to the strategic JV with Salt Bush as it will accelerate the ability to unlock the value of our west central Alberta properties," said Terry Meek, President and CEO of Point Loma. "The agreement will allow us not only to begin this much anticipated growth phase with the initiation of drilling activity but allows us to explore other opportunities through this additional access to capital in a challenging market."

Current production of approximately 900 boe/d is anticipated to ultimately increase with the deployment of the proceeds through certain identified acquisitions, development drilling and new pool drilling opportunities.

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.

A Note Regarding Forward-Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws, including without limitation, statements pertaining to Point Loma's expectations as to production and future potential production increases, as well as increases in cash flow and the timing thereof; future gas processing rates; Point Loma's expectations as to future prices of oil and natural gas; the focus of Point Loma's management team and go-forward strategy.

The use of any of the words "will", "expects", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements or information. Although Point Loma believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Point Loma cannot give assurance that they will prove to be correct.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; the inability of Point Loma to bring additional production on stream or in the anticipated quantities disclosed herein; the uncertainty of estimates and projections relating to reserves, resources, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to tax laws, royalties and environmental regulations, actual production from the acquired assets may be greater or less than estimates. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide security holders with a more complete perspective on Point Loma's future operations and such information may not be appropriate for other purposes.

The forward-looking statements and information contained in this press release are made as of the date hereof and Point Loma does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Oil and Gas Information

"BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Contact Information

  • For further information, please contact:

    Terry Meek
    President and CEO
    Telephone: (403) 705-5051 ext.101
    tmeek@pointloma.ca

    Kevin Angus
    Executive Vice-President Business Development
    Telephone: (403) 705-5051 ext. 103
    kangus@pointloma.ca

    Randall Boyd
    Vice President Finance and CFO
    Telephone: (403) 705-5051 ext. 105
    rboyd@pointloma.ca