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New Deal 'Step In Right Direction Toward Turnaround for Energy Firm'
Research Report

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The new agreement and its potential impact on Point Loma Resources are discussed in a Mackie Research Capital Corp. report.

In an April 21 research note, Mackie Research Capital Corp. analyst Bill Newman wrote that the transaction outlined in Point Loma Resources Ltd. (PLX:TSX) new Wizard Lake sales agreement, with creditors for a total consideration of $2.9 million, "will help improve the balance sheet and put the company on a better footing to pursue its other development and exploration plays on its large, concentrated, high working interest acreage located in Central Alberta."

Those assets, which provide additional upside for investors, Newman noted, include a conventional oil play in the Banff Formation, oil expansion plays in the Mannville and a shale oil resource play in the Duvernay.

Newman explained the terms of the new and the prior agreements.

The new agreement calls for the Calgary-based oil and gas firm, Point Loma Resources, to sell 97.5% of its 40% interest in the Wizard Lake development in Alberta, Canada, to its secured debenture holders and a secured creditor.

In exchange, all of Point Loma Resources' outstanding secured debentures and total owed to the secured creditor will be canceled. Also, Point Loma will retain a 1% operating interest in Wizard Lake. The deal is expected to close on May 21, 2020.

In the prior arrangement, which was canceled on March 31, 2020, Point Loma Resources was to sell its 50% working interest in Wizard Lake to Whitebark Energy. The transaction was to be completed after three closings.

The first closing took place, in which Whitebark paid Point Loma $1.2 million for a 10% interest in Wizard Lake. Subsequently, Whitebark chose not to go through with the remaining two closings. Accordingly, at the end of March 2020, Point Loma owned 40% of Wizard Lake.

Taking into account the amount Whitebark paid Point Loma under the first agreement, the total consideration Point Loma is now to receive for its Wizard Lake interest, if the deal goes through, is $4.8 million, as calculated by Mackie Research, Newman indicated.

That number is derived from these components: from the past agreement, $1.2 million in cash already paid by Whitebark for a 10% interest in Wizard Lake, and from the new agreement, $2.9 million for the cancellation of debentures and secured debt and $700,000 for the reduction of a payout account.

Mackie Research has a Buy rating on Point Loma Resources and a target price of CA$0.15 per share. The current share price is CA$0.02.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from Mackie Research, Point Loma Resources Ltd., Update, April 21, 2020

RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
1. Within the last year, Mackie Research Capital Corporation has managed or co-managed an offering of securities by the subject issuer.
2. Within the last year, Mackie Research Capital Corporation has received compensation for investment banking and related services from the subject issuer.
3. Relevant disclosures required under Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com.

ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst's personal views and (ii) no part of the research analyst's compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.




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