Point Loma shares surge as Mackie gives upbeat assessment

Point Loma Resources Ltd (CVE:PLX) raced up 20 % today as broker Mackie said the stock was a great buying opportunity and has the firepower to grow reserves and production in 2017.

On the heels of the joint venture deal with Salt Bush and the equity financing with Evenergy, it has a capital budget of  $5mln for the second and third quarter which includes the drilling of two horizontal development wells and one vertical exploration well in Alberta.

With success, the oiler plans additional drilling in the fourth quarter, notes analyst Bill Newman, who expects a re-rating of shares.

Moreover, last month Tidewater Midstream and Infrastructure bought its 70 mmcf/d (million cubic feet per day) Paddle River gas plant and Tidewater is currently reviewing plans to reactivate the  plant which would allow Point Loma to reactivate previously producing suspended wells.

“With the plant reactivated, PLX could add net production volumes of 400 boe/d simply by truing on the shut-in wells. Additionally with the plant operational again, PLX see multiple drilling opportunities.”

In addition, Point Loma trades at 46% of Mackie’s core NAV (net asset value) of $0.77 per fully diluted share and 29% of  the broker’s risked NAV of $1.21 per fully diluted share.

Mackie rates shares a ‘buy’ with a $1.10 target price.

Shares added 20% to $0.42 on the day.

Story by ProactiveInvestors