logo-loader
viewWhitebark Energy Ltd

Whitebark Energy launches $3 million rights offer to revitalise growth momentum

Whitebark will use the funds to maintain and optimise production capacity at the existing Rex wells and to take advantage of asset acquisition opportunities.

Whitebark Energy Ltd - Whitebark Energy launches $3 million rights offer to revitalise growth momentum
The price shock in the sector has created attractive acquisition opportunities

Whitebark Energy Ltd (ASX:WBE) has launched a non-renounceable, pro-rata entitlement offer to existing shareholders to raise up to $3 million.

Eligible shareholders will be able to subscribe for one new share for every three shares they hold at the record date, at a subscription price of 0.3 cents per share.

This represents a discount of about 35% to the 15-day volume-weighted average price (VWAP) of Whitebark shares.

The proceeds from the offer will be used by the company for the following purposes:

  • Working capital (comprising operational and capital costs accrued and pending);
  • Acquisition of land mineral leases;
  • Wizard Lake Field maintenance and workovers; and
  • Entitlement offer costs.

Rationale

The energy sector has experienced major disruptions from a depressed oil price and from COVID-19 restrictions.

This has impacted Whitebark’s cash flow generation and required production from its Wizard Lake wells to be constrained to preserve the long-term asset value.

At the same time, the price shock in the sector has created attractive acquisition opportunities.

These disruptions have provided an opportunity for Whitebark to proceed with maintenance of the existing Rex wells to optimise production capacity, and to better position the company to take advantage of select asset acquisition opportunities.

Strong support from the chairman

Whitebark chairman Charles Morgan said: “The board has carefully considered the current energy market circumstances and has decided to proceed now to strengthen the company’s operational and financial capacity to emerge from the energy sector and COVID 19 crisis in a better position.

“The offer has been attractively priced to encourage broad shareholder participation, and has been structured to give existing shareholders priority in order to maintain or increase their exposure.

“The directors of Whitebark believe this issue will better position the company to recommence its growth momentum. I intend to participate and contribute approximately $250,000 to the offer.”

Quick facts: Whitebark Energy Ltd

Price: 0.004 AUD

ASX:WBE
Market: ASX
Market Cap: $12.55 m
Follow

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Whitebark Energy Ltd named herein, including the promotion by the Company of Whitebark Energy Ltd in any Content on the Site, the Company...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Whitebark Energy raising funds to support field development and production...

Whitebark Energy Ltd's (ASX:WBE) David Messina provides an update on the company's Wizard Lake Operations in Canada and the current partially underwritten entitlement issue to raise $A3 million announced last week. These funds will support Wizard Lake improvements and land...

3 days, 1 hour ago

2 min read