Point Loma Resources Announces Successful 700 boepd Delineation Well Test at Wizard Lake
CALGARY, ALBERTA / ACCESSWIRE / September 5, 2019 / 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.
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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 the anticipated production of the Rex horizontal well; the anticipated timing to complete the second farm-out well and whether such well will be drilled, the successful completion of the two well farm-out program with Salt Bush prior to December 31, 2019, whether the Corporation will complete the disposition of the Wizard Lake oil property on satisfactory terms; the anticipated increase in oil and ngl production weighting for the Corporation; statements pertaining to Point Loma’s expectations as to production and drilling opportunities and future potential production increases; the expected working interest position in the farm-out lands once tied-in for production; the expected timing of tie-ins; additional drilling opportunities identified by the Corporation; 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; and statements. Statements relating to “reserves” are also deemed to forward-looking statements, as they involve the implied assessment based on certain estimates and assumptions, that the reserves can be profitably produced in the future.
The use of any of the words “will”, “could”, “would”, “expects”, “believe”, “plans”, “potential” and similar expressions are intended to identify forward-looking statements or information. These statements should not be read as guarantees of future performance or results. 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, 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.
Well test results should be considered as preliminary. Neither a pressure transient analysis nor a well-test interpretation has been carried out on the well test data contained herein and therefore the data contained herein should be considered to be preliminary until such analysis or interpretation has been done. There is no representation by the Corporation that the disclosed well results included in this news release are necessarily indicative of long term performance or recovery. As a result, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Corporation or that such rates are indicative of future performance of the well.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Point Loma Resources Ltd.