Point Loma Resources Ltd (LON:PLX) has agreed to acquire oil and gas producing assets in west central Alberta.
It is paying C$1.6mln to acquire the assets, which are contiguous to the company’s own operations in the area.
The new operations, spanning some 55,000 acres, currently yield 410 barrels oil equivalent per day comprising 95% natural gas.
"This acquisition will continue Point Loma's growth in size and strength as a junior oil and gas company,” said chief executive Terry Meek.
“We continue to seek quality assets that will extend our core focus area at favorable metrics.
"The expansion of our focus area will continue to build shareholder value as Point Loma develops the Mannville trend in west central Alberta."
Broker Mackie said the firm was a rapidly growing, exploration and production company with a large concentrated land base in west central Alberta.
The acquisition announced today nearly doubles production to an estimated around 900 boe/d and increases its land base in west central Alberta by 43% to 180,600 net acres, it said.
"We maintain our BUY recommendation and our $1.00 target price on PLX on its large and growing prospect inventory for conventional oil and gas within the multi-zone Manville trend," noted analyst Bill Newman.