In a statement, the firm said the offering will consist of up to around C$1 million in flow-through units, at a price of C$0.125 per unit and around C$500,000 at a price of $0.115 per unit.
Point Loma is an 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.
READ: Point Loma says production test results for Wizard Lake Rex well determined commercial production has been established
As part of the offering, each flow-through unit consists of one share and one warrant. Each unit is comprised of one common share and one warrant, which entitles the holder to acquire one common share at a price of $0.155 each for a period of 36 months following the closing.
The firm has an inventory of over 500 opportunities on its large multi-zone land position, where it's seen recent drilling success in the Rex Oil play, an ongoing fully carried horizontal drilling program through to the end of 2019 and select rationalization of certain assets expected in the fourth quarter of 2019.
The firm's business plan is to utilize its experience to drill, develop and acquire accretive assets with the potential to employ horizontal multi-stage frac technology and to exploit opportunities for secondary recovery.
The offering is expected to close around September 30, 2019.
Rex oil play looks promising
The firm also updated on its progress at a number of its key oil plays. At the Rex (Upper Mannville) oil play in the Wizard Lake area, Point Loma and its working interest partner, Salt Bush Energy Ltd control strategic acreage and have indicated 18 potential drilling opportunities on the pool.
Post the successful drilling and completion of the initial horizontal 16-17 discovery well, the corporation negotiated a strategic farm-out deal to allow for the drilling of two fully carried (at no cost to Point Loma) horizontal delineation wells in the evolving Rex Oil play at Wizard Lake.
The firm noted that with the Rex oil play continuing to attract the attention of key industry operators, the firm has identified and captured a second Upper Mannville oil pool target which is comparable to the Rex oil discovery. This oil target is located in the Leaman area just north of the firm’s existing Mannville oil-producing property and is controlled by Point Loma. Similar to the Rex Oil Wizard Lake pool, the firm believes this could result in an estimated 20 follow-up drilling opportunities with success.
The firm is reviewing proposals to purchase its interest in the Wizard Lake property, which combined with the funds raised from the current offering, will enhance the Corporation’s overall financial flexibility and could provide additional funds for other high impact drilling activities.
Duvernay Shale also promising
Point Loma holds 11,520 net acres (18 net sections) in the Duvernay Shale light oil play and continues to monitor nearby industry activity and overall developments in this emerging light oil play. Including both the West and East Duvernay Shale basins, the industry to date has drilled over 150 horizontal Duvernay shale oil wells within this emerging oil play with key industry activity both at land sales (over $172 million in aggregate in the West Basin Duvernay oil play alone) and through strategic farm-in activity.
Terry Meek, President and CEO of Point Loma commented: “With the Wizard Lake and Leaman Rex (Upper Mannville) oil plays, Banff oil targets, Lower Mannville assets and Duvernay Shale exposure, Point Loma controls multiple high impact oil plays that have significant upside value to the corporation. We look forward to continuing with ongoing horizontal drilling activities and enhancing the financial flexibility of the corporation through the expected sale of select asset(s) through the fourth quarter of 2019 aimed at unlocking shareholder value."
Point Loma stock was halted on Tuesday.
Contact Katie Lewis at [email protected]