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Corporate Spotlight

Whitebark offers investors a unique combination of cash generation from growing oil & gas production plus exposure to high reward exploration, a prolific North American shale play, and both conventional and non-conventional discoveries in Western Australia.
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Targeting commercial oil production - Wizard Lake

INTERIM RESULTS

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Whitebark’s Rex-1 interim flow rate hits 275bbls oil/day and increasing 

 ASX Announcement 19 June 2019 


Interim flow rates from Rex-1 are very encouraging, Whitebark land position and working interest in Wizard Lake oil field continues to increase. 


  • Current production after ten days is estimated at 275 bbls of oil per day (gross). 
  • Production still increasing as pump speed is optimized and the well continues to clean up. 
  • Rex-2 remains on schedule to be spud in late July. 
    • Whitebark working interest in this well is 40%, increasing to 50% for Rex-3. 
  • An additional 720 acres has also been secured over the Wizard Lake oil field taking the total gross area to 3,385 acres providing 18+ potential drilling opportunities.


Whitebark Energy Ltd (ASX : WBE) is pleased to provide a progress update on the Wizard Lake development and the Rex-1 well that was placed on production on 5 June 2019.


The Wizard Lake Rex oil discovery well has been producing for ten days and continues to clean up with increasing oil rates as illustrated below in Figure 1. The well will continue to be optimized to obtain a stabilised initial flow rate. The API Gravity of the oil is 18.5 and it is being sold as a medium grade crude at approximately C$58/bbl. Whitebark is receiving 100% of the net income from the well until after payout of the facility and well workover costs of approximately C$750,000.


Figure 1 - Rex-1 Daily Production 


Whitebark Managing Director, Mr David Messina said: “The Rex-1 well has been cleaning up nicely and, consistent with our pre-production expectations, daily production has approached the levels we saw in the completion testing and is continuing to increase. This validates the initial testing results and puts us in a good position for a quick payback, thereby supporting the investment case for the next Rex wells.” 


“The success at Rex-1 has increased our confidence around the broader Wizard Lake development and we have taken the opportunity to secure additional ground that will increase our inventory of future well locations to at least 18 wells.” 


Figure 2- Rex Development Plan and Additional Land Acquisition 


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PRODUCTION COMES ON LINE

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Production comes on line as WBE increases its share of Wizard Lake


  • First commercial oil produced from Rex-1 well, Wizard Lake, Alberta, Canada.

  • Steps in place to drill Rex-2 and Rex-3 this year.

  • Increase in ownership up to 50% following drilling of Rex-2 and Rex-3.
  • Whitebark remains fully funded for the next stage of Wizard Lake development.


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FIRST OIL

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Whitebark produces first oil from Wizard Lake 

ASX Announcement 5 June 2019 


Facilities completed and Rex 1 tied into permanent production


Highlights 

  • Construction of Wizard Lake pipeline and production facilities completed and tied into pipeline. 
  • First commercial oil produced from Rex-1 well. Well clean up underway. 
  • Low cost water management facilities utilised. 
  • Steps in place to drill Rex-2 and Rex-3 this year, resulting in an increased Working Interest to Whitebark in the Wizard Lake oil field.


Whitebark Energy Ltd (ASX: WBE) is pleased to announce that it has commenced commercial oil production from its Rex-1 well after the completion of production facilities and a pipeline at its Wizard Lake project.


Pumping began overnight with fluids now flowing into the series of tanks at the production facility for water removal and transportation to a nearby refinery.


Whitebark Managing Director David Messina said: “First commercial oil production from Wizard Lake is a key milestone in our strategy to drive production and reserves growth in our acreage in Alberta, Canada.”


“Not only have we successfully increased our production and reserves position, we have also demonstrated our ability to bring wells onto production quickly and at a low capital cost. This is very important given the reserves update identified 12 to 17 likely well locations at Wizard Lake.”


Figure 1 - Surface Facilities on the newly constructed pad at Wizard Lake 


“With production now up and running, we can turn our full attention to the drilling of Rex-2, where we have recently increased our working interest to 40 per cent on the completion of the well. A successful Rex-2 outcome should put the Company in a very strong position to internally fund the development of the remaining wells at Wizard Lake given the low drilling and development costs in Canada.”


Whitebark expects the Rex-1 well will take a number of weeks for the well to clean-up and the oil cut to stabilise. 


To remove any associated water, Whitebark is employing a low-cost modular separation technique, currently being adopted throughout the region, using a series of tanks and some of the gas derived from the well will be used to heat the emulsion and separate out the water. 


“The gas to heat the condensate is effectively free so it is an efficient oil/water separation system,” he said.


Figure 2 - Wizard Lake Surface Processing 

The new central production and processing facility is located 1.6 km from the Rex 1 well, and has the capacity to service additional Rex wells through the addition of further tank modules.

Figure 3 - Wizard Lake Development Plan 


Click here to view the full announcement

INCREASES SHARE

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Whitebark increases share of Wizard Lake 

ASX Announcement 31 May 2019 


Whitebark’s interest in the Wizard Lake oil field to increase to 50% following a two well farm-in


  • Whitebark’s working interest in the Wizard Lake oil development to increase up to 50% following a two well drilling program. 
  • Whitebark will fund 100% of drilling costs of the next two Rex wells: 
    • Plan to drill both wells in 2H 2019; 
    • The first of these wells, Rex-2, is targeted to spud in July/August 2019 for an estimated cost of CAN$2.3m 
  • The successful Rex-1 well is on target to commence production in early June 2019. 
  • Whitebark remains fully funded for the next stage of the Wizard Lake development.


Whitebark Energy Ltd (ASX : WBE) is pleased to announce that it has reached agreement with its Canadian partner, whereby it will increase Whitebark’s interest in the Wizard Lake oil development to 50% after the completion of a two well drilling program. Whitebark’s current interest is 30% 


As a part of the agreement, Whitebark will fund 100% of the drilling costs of the next two wells in the Wizard Lake oil development program, Rex-2 and Rex-3.


Rex-2 is expected to spud in July/August 2019 and Whitebark will receive 75% of well revenues until payout of its capital investment. Whitebark’s ongoing interest in the entire field will be 40% following payout. Whitebark may then elect to proceed with Rex-3, expected to be drilled prior to 31 December 2019. Whitebark will receive 75% of the well revenues until capital payback and thereafter own 50% of the entire field and the surrounding Area of Mutual Interest (AMI).


The wells will delineate the pool with planned 1400m horizontal and an 1800m horizontal sections to be completed with multi-stage fracs. This is expected to assist in confirmation of pool size and productivity and will test the application of extended reach wells for further development of the pool. 


Whitebark Energy Managing Director David Messina said the agreement reflects Whitebark’s commitment to progressing the Wizard Lake oil development as soon as possible.


“The Wizard Lake Oil Development presents a huge opportunity for Whitebark and we are committed to realise the substantial value that the discovery offers. We have been flexible with our funding program over the past six months and through a combination of asset sales and strategic equity raisings, we have positioned Whitebark to pursue a more aggressive growth program,” he said.


“The Rex-1 well remains on track to commence oil production in early June 2019 as completion of the site facilities draws near, and we can now start to focus on drilling Rex-21 .” 


Background 

The Wizard Lake Rex well was spud on the 24 November 2018 and, following a 27-stage fracture stimulation program, the well commenced cleanup flows on December 24th.


Initial flow testing of the Wizard Lake Rex horizontal oil well recorded production rates of more than 300 barrels of oil per day prior to the completion of testing. Following reconciliation of the hydrocarbons produced from the January 2019 flow test of its Wizard Lake Rex well, the total oil produced from the 16-day flow test has been increased from 1833 barrels of oil to 2845 barrels – a 55% increase (Refer ASX Release 20 February 2019). This increase in total testing volumes would very likely mean that daily production, when the well is brought on line, will be higher than initially forecast.


The funded 2019 Wizard Lake development program encompasses the construction of a pipeline and installation of initial production facilities on a multi-well pad currently under construction and the drilling of two new Wizard Lake wells this calendar year2 . Reserves assessment indicates the likelihood of 12 to 17 follow-up well locations. 3


Click here to view the full announcement

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