Sign up USA
Proactive Investors - Run By Investors For Investors
Why invest in PLX?
Point Loma Resources: THE INVESTMENT CASE

Point Loma Resources funded and looking to double production in Alberta

Point Loma has over 160,000 net acres concentrated in west central Alberta
Point Loma Resources cashed up and looking to double production in Alberta
INVESTMENT OVERVIEW: PLX The Big Picture
Point Loma is aiming to spend around $3.5 million in the third quarter of 2017 on work programs

Point Loma Resources (CVE:PLX) is a rapidly growing, undervalued oiler, which should double its output in 2017.

It has already struck major deals this year, which have shifted the dial. One is a joint venture agreement with Transerv Energy's subsidiary Salt Bush, which allows it to drill multiple wells in the rest of the year.

The other was the $4 million investment from Evenergy at 48 cents a share, which will accelerate the junior's exploration, development and acquisition projects in 2017.

Evenergy is a subsidiary of Zhongcheng Group -  one of the largest private petroleum refinery, oil products and LPG distribution and retail companies in China.

What and where are the assets..?

Point Loma  has  over 160,000 net acres concentrated in west central Alberta. They lie in what's called the Mannville Trend, where it has an established an inventory of more than 400 potential horizontal well sites.

It is worth  noting that Mannville horizontal wells are highly economic even at low crude prices with IRR (internal rate of return) of between 50%  and 70%.

A positive latest quarter...

In the last three month quarter (second) PLX posted a profit of C$421,000 on revenues of C$980,000, helped by a C$1.7mln gain on the disposal of assets.

That compared with a loss of C$1.75mln on zero revenues in the same period of 2016.

In terms of barrels of oil equivalent (boe) per day produced, the total for the quarter to end June was 566.

Fully funded and poised for work..

Point Loma is aiming to spend around $3.5 million in the third quarter of 2017 (to end September) to include drilling two development wells, each of which could add between 150 and 250 boe/d.

One of those is the planned new Mannville development horizontal well within its Paddle River asset. The firm will also reactivate the 12-4 well in the same pool.

Drilled in 2013, the 12-4 well is tied into the group's network but has not yet produced due to facility constraints.

Notably, with the reactivation of the Paddle River gas plant, the group could add net production volumes of over 650 boe/d with little or no risk.

The group is looking to reactivate about 16 wells in the Paddle River area which is expected to add around 2.0 mmcf/d (net) -  millions of cubic feet per day -  of natural gas plus associated liquids.  

At the group's Thornbury asset area, it plans to re-connect and optimize facilities that could add net production of 1.5 mmcf/d, or 250 boe/d through company operated infrastructure.

A doubling of production, reckons broker Mackie

Mackie analyst Bill Newman estimates that the net 'behind pipe volumes' in the greater Paddle River area is between 650 and 750 boe/d, while the two well development drilling program in September could add 250 to 400 boe/d for a total combined production additions of 900 to 1,150 boe/d.

"We expect a rerating of the stock as the company builds production in H2/17,"  he says.

The broker repeats a 'buy' rating and targets $1.10 for the shares - not that far off three times' where they are now at 32 cents.

View full PLX profile View Profile

Point Loma Resources Timeline

Related Articles

onshore drilling operation
October 04 2017
Chief executive Randeep Grewal highlighted that the arrangement eliminates ambiguity and provides a transparent and clear road-map through exploration to commerciality
Point Loma Resources cashed up and looking to double production in Alberta
August 28 2017
Point Loma has over 160,000 net acres concentrated in west central Alberta
picture of gas pipes
September 12 2017
Dividends and paying them out underpin Diversfied Gas's strategy

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright © Proactiveinvestors.com, 2017. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use