Point Loma Resources Ltd. announced the execution of a binding letter of intent (the "LOI") outlining a farmout agreement with a private company ("Privco" or the "Farmee") which includes a commitment by Privco to drill a horizontal well on at least one of the Corporation's oil and gas projects. The LOI is subject to the execution of definitive farmout and purchase and sale agreements incorporating the terms of the LOI and other industry standard conditions. The LOI contemplates that Point Loma will initially assign 20% of the Corporation's interests in three areas of mutual interest ("AMI") lands to the Farmee in exchange for a commitment to drill a horizontal well on one of the three AMI lands to earn additional interests in the drilled AMI lands. Once the first horizontal well is drilled there is the opportunity for the Farmee to elect to drill and earn similar interests in the second and third AMI areas on a rolling option basis. The first horizontal well is committed to be drilled prior to February 28, 2021. Should the commitment horizontal well not be drilled, there is a non-performance penalty of $100,000 payable to Point Loma and the initial assignment of lands to the Farmee would be nullified and revert back to Point Loma. The drilling of an earning well will result in either a 15% GORR payable to Point Loma convertible at payout to 50% of the Corporation's pre-drill working interest or, at the election of the Farmee, the Farmee will earn 70% of the Corporation's pre-drill working interest in the block of AMI lands on which the drilling occurred.