CALGARY, AB / ACCESSWIRE / August 29, 2019 / Point Loma Resources Ltd. (PLX.V) (the "Corporation" or “Point Loma”) reports its financial and operating results for the three and six months ended June 30, 2019. Highlights of the period and additional updates are summarized below:
Q2 - 2019 Financial and Operating Results
| Three months ended | Six months ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Financial ($ thousands, except share amounts) | ||||||||||||||||
| Petroleum and natural gas revenue | $ | 1,335 | 1,502 | $ | 2,863 | 2,702 | ||||||||||
| Cash flow from (used in) operating activities | 337 | 145 | (93 | ) | (791 | ) | ||||||||||
| Funds flow used in operations(1) | (820 | ) | (688 | ) | (1,309 | ) | (1,597 | ) | ||||||||
| Per share - basic(1) | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.03 | ) | ||||||||
| Net income (loss) | (3,580 | ) | 505 | (5,170 | ) | (1,074 | ) | |||||||||
| Per share - basic(1) | (0.05 | ) | 0.01 | (0.07 | ) | (0.02 | ) | |||||||||
| Capital expenditures | 589 | 59 | 932 | 1,672 | ||||||||||||
| Working capital deficiency | 6,193 | 2,990 | 6,193 | 2,990 | ||||||||||||
| Share capital | ||||||||||||||||
| Weighted average shares outstanding | 71,851,730 | 55,244,883 | 71,735,603 | 55,073,344 | ||||||||||||
| Outstanding shares | 75,143,017 | 60,322,773 | 75,143,017 | 60,322,773 | ||||||||||||
| Operations | ||||||||||||||||
| Daily average production | ||||||||||||||||
| Crude oil and liquids (bbls/d) | 238 | 204 | 225 | 171 | ||||||||||||
| Natural gas (mcf/d) | 2,827 | 3,378 | 2,939 | 3,098 | ||||||||||||
| Total production (boe/d) | 709 | 768 | 715 | 687 | ||||||||||||
| Average sales price | ||||||||||||||||
| Crude oil and liquids ($/bbl) | 47.04 | 61.58 | 47.35 | 59.76 | ||||||||||||
| Natural gas ($/mcf) incl commodity gains and losses | 1.19 | 1.17 | 1.76 | 1.52 | ||||||||||||
| Equivalent ($/boe) | 20.70 | 21.52 | 22.14 | 21.72 | ||||||||||||
| Netback(2) ($/boe) | ||||||||||||||||
| Revenues | 20.70 | 21.52 | 22.14 | 21.72 | ||||||||||||
| Royalties | (3.56 | ) | (2.15 | ) | (3.23 | ) | (2.39 | ) | ||||||||
| Net operating expense (3) | (18.90 | ) | (18.21 | ) | (18.84 | ) | (19.12 | ) | ||||||||
| Transportation expense | (1.31 | ) | (0.61 | ) | (1.17 | ) | (0.71 | ) | ||||||||
| Operating netback (loss)(2) | (3.07 | ) | 0.55 | (1.10 | ) | (0.50 | ) | |||||||||
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Funds used in operations is cash flow used in operating activities less changes in non-cash working capital. See “Non-GAPP Measures” below. Per share amounts are calculated using the same number of weighted shares as net loss.
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Operating netback is determined by deducting royalties, net operating expenses and transportation expenses from petroleum and natural gas revenue. See “Non-GAAP Measures” below.
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Net operating expense is defined as operating expenses less processing fees. See “Non-GAAP Measures” below
Q2-2019 Activity Overview and Subsequent Activity
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During Q2-2019, $0.6 million of capital was expended on production facilities for the initial Rex oil discovery well, Wizard Lake 16-17-48-27W4 (“WL 16-17”), all of which was funded by Salt Bush Energy Ltd. (“Salt Bush”) and is subject to a payout provision based on future net operating income.
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WL 16-17 was placed on production during June 2019 and resulted in an increase in oil weighting of the Corporation from 27% in Q2-2018 to 34% in Q2-2019. Continuous production through a full quarterly period and the addition of the second Wizard Lake horizontal well is expected to continue to increase the Corporation’s oil weighting.
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Entered into a two well farm-out program with Salt Bush that could result in two horizontal delineation wells being drilled into the recently discovered Rex oil pool prior to December 31, 2019. After the completion of the earning, Point Loma and Salt Bush would each have a 50% working interest in the Wizard Lake lands. One of the two wells is expected to be an extended reach horizontal which would add to the understanding of the deliverability of such wells and the optimization of further development of the pool. A total of approximately $5 million of gross capital could be spent on the two farm-out wells to delineate the pool at no cost to Point Loma.
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The Wizard Lake HZ 1-8-48-27W4 Rex well (“WL 1-8”) was successfully drilled and completed, on schedule and on budget. WL 1-8 was 20% longer than WL 16-17 and has been successfully completed with a 35 stage frac which placed approximately 1000 tonnes of frac sand. The well is planned to be flowed back and placed on production during the coming weeks.
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Retained Mackie Research Capital Corporation to canvas the market for parties interested in a transaction to potentially acquire Point Loma’s interest in its Wizard Lake Rex oil assets. This process is ongoing with numerous counterparties currently engaged. The Corporation will provide a further update if/when a satisfactory transaction has been secured.
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Closed debt settlement agreements with certain arm’s length parties to settle trade payables in the sum of $634,250 in consideration for the issuance of 3,523,613 settlement units.