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Whitebark Energy Ltd

Whitebark Energy realising potential of 20+ well Wizard Lake Project

Snapshot

The first two wells drilled at Wizard Lake, Rex-1 and Rex-2, have resulted in proven producing assets.

The Rex drill site at Wizard Lake project

Quick facts: Whitebark Energy Ltd

Price: 0.012 AUD

Market: ASX
Market Cap: $30.54 m
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  • First oil from Rex-1 in June 2019, Rex-2 in September 2019, and Rex-3 targeting December 2019
  • Data from Rex-1 and Rex-2 have demonstrated excellent reservoir qualities with up to 21% porosity
  • Success to date has led to an accelerated development program targeting additional wells

What does Whitebark Energy do?

Whitebark Energy Ltd (ASX:WBE) specialises in oil exploration and development in Canada and holds a fraccing asset in Western Australia where a moratorium on hydraulic fracture stimulation was lifted last year.

It is run by David Messina, a senior executive who has more than 23 years experience in the energy and agricultural biotechnology industries.

Messina has led energy and gas sector companies for the past 13 years and has been based in London, Australia and Europe.

The managing director is skilled at raising significant amounts of funds and identifying strategic partnership opportunities.

What does Whitebark Energy own?

The key asset in Canada is the Wizard Lake Oil Pool Project housed in the Point Loma Joint Venture (PLJV).

Whitebark’s working interest in the Wizard Lake oil development is now at 40% and will increase to 50% following the drilling and completion of Rex 3

At 30 June 2019, the project hosted 2P resources of 1,398 million barrels of oil equivalent

Wizard Lake Oilfield has potential for 20+ wells

In November 2019, Whitebark commenced drilling operations for its third oil well Rex-3 at the Wizard Lake Project ahead of schedule.

Notably, the Wizard Lake Oilfield has the potential to contain over 24 wells targeting 11 million barrels of oil equivalent.

Drilling of the third well followed the commencement of construction work to expand processing facilities at Wizard Lake.

The expanded facilities will be capable of handling 5,000 barrels of fluid a day along with 5 million cubic feet per day (mmcfd) of gas.

The expansion is supported by the success of the Rex-1 and Rex-2 wells.

Oil is trucked to market while gas will be sent to a nearby processing plant via the gas pipeline being built.

In Australia, the West Perth company has the Warro Gas Project northeast of Wheatbelt town Badgingarra and east of holiday spot Jurien Bay.

Warro was previously the company’s flagship project when it was known as Transerv Energy Limited (ASX:TSV).

Perth Basin project Warro has 4.4 to 11.6 trillion cubic feet (Tcf) of gas-in-place (GIP).

It is found 110-200 kilometres north of WA’s capital Perth and less than 35 kilometres from Dampier-Bunbury Natural Gas Pipeline and the Dongara-Perth Parmelia Pipeline.

Dampier and Bunbury both feature ports, as does Perth at two harbours run by Fremantle Ports.

Whitebark welcomed the findings of the Independent Scientific Panel Inquiry into Hydraulic Fracture Stimulation in Western Australia 2018’s final report released in November 2018

The panel found the risks associated with gas extraction techniques were minimal and could be managed safely.

While the state government committed to implementing all the inquiry’s recommendations, some have tipped fraccing in WA would not resume until 2020.

Whitebark has previously noted its cost of fraccing in Canada was about 20% of comparable projects in WA and was achieved in a four-week approval time.

The company had $2.6 million cash on September 30, 2019 and expected $2.23 million of cash outflows in the December quarter 2019.

Whitebark’s exploration and evaluation spend for the March quarter 2019 had a  budget of $2.18 million.

Inflection points

  • Production growth through additional wells at Wizard Lake

  • Production growth resulting in operating cash flow growth

  • Cash flow growth resulting in break-even status

  • WA Government progress on fraccing reform

Managing director David Messina expects future wells to deliver

“Whitebark continues to advance the Wizard Lake development program in Canada with operations starting on Rex-3 ahead of schedule.

“With the extended reach horizontal section of Rex-3 we are very optimistic about continuing to see improvements over the previous Wizard Lake wells.”

Proactive caught up with Messina back in September 2019 for an update following a capital raising to expedite development of the Wizard Lake Oilfield.

 

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Watch

Full interview: Whitebark Energy updates on Wizard Lake activity with Rex-2...

Whitebark Energy Ltd (ASX:WBE) managing director David Messina updates Proactive on Rex-2 well at the Wizard Lake Project in Canada with results exceeding initial expectations. Rex-2 was drilled and fracced in August and tested in September 2019.  The managing director said the strong...

on 12/9/19

4 min read