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Point Loma Resources' Paddle River acquisition could double output in near term

Broker Mackie has repeated a 'buy' and $1.10 price target.
YesteYesterday, the Salt Bush venture said it had acquired two wells and rights at its Paddle River asset

Point Loma Resources Ltd (CVE:PLX) is fully funded via its two joint ventures with Salt Bush and Evenergy and is looking at significant production increases in the short term at little cost.

So says broker Mackie, which has repeated a 'buy' and $1.10 price target.

Yesterday the Salt Bush venture said it had acquired two wells and rights at its Paddle River asset - firing the starting gun on new production from one well earmarked for next month (September).

The 12-4 well was drilled in 2013 but has not been produced due to past facility constraints  but output is now anticipated to begin in September, said Point Loma.

The 2-4-56-7W5 well has produced 200mln cubic feet of gas and 4,000 barrels of oil in total to date and is a potential re-entry candidate into the Ostracod A pool

Including the 12-4 well, the broker estimates the total net behind pipe production in the Paddle River area is between 650 boe/d and 750 boe/d (barrels of oil equivalent per day).

"We expect the majority of this production to be on-stream within the next 8 weeks," said analyst Bill Newman.

"The tie-in of behind pipe volumes in the greater Paddle River area has the potential to double corporate production in the near term which should rerate the stock.

"An additional development drilling commencing in September could add 250 boe/d to 400 boe/d by year-end," added the analyst.

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