- Whitebark Energy (WBE) has increased production at its Wizard Lake Oil Project and will review its 2020 drilling program off the back of a rebounding oil price
- After the oil price crashed amidst the global CODID-19 pandemic, the company plugged its Rex one and two wells, but allowed Rex three to flow freely, in a bid to mitigate the recent volatility in the oil price
- Despite the oil price crash, the company says it retained operation capacity and will now increase production at the Canadian project
- In other company news, Whitebark has decided not to exercise its right of first refusal in regards to Point Loma Resources selling its interest in the project, which was executed in April
- Whitebark Energy ended the day in the grey, with shares selling for 0.4 cents each
Whitebark Energy (WBE) has increased production at its Wizard Lake Oil Project (WLOP) and will review its 2020 drilling program off the back of a rebounding oil price.
The company took several measures to mitigate the recent volatility of the oil market, which crashed as a result of the global COVID-19 pandemic.
Whitebark retained operation capacity after it reduced the output of well pumps Rex one and two, while it allowed Rex three to flow freely.
It proved to be a good option form the company, which has 200 barrels of oil per day and 1.6 million cubic feet per day of gas throughout May, with Whitebark maintaining a low operating cost of less than C$10 (about A$10.94) per barrel.
“The initial Wizard Lake wells have been very successful, and the Wizard Lake Oilfield Project offers tremendous growth potential for Whitebark.”Managing Director, David Messina
Not exercising its right of first refusal
In other company news, Whitebark decided not to exercise its right of first refusal in regards to Point Loma Resources (PLX) selling its interest in the project, which was executed in April.
PLX announced the sale of 97.5 per cent of its circa 40 per cent interest in the WLOP in April for C$2.9 million (approximately A$3.17 million). The terms of the joint venture farm out and option agreement, dated May 29, 2019, provided Whitebark with a 30-day period to exercise its right of refusal over any sale of the project. This period ended on May 21, 2020.
Whitebark Energy Managing Director, David Messina, said the company carefully considered the option to acquire the residual interest of the project.
“In both cases, we decided it was prudent to preserve our capital in these highly uncertain times and focus on maximising and delivering value from our current asset positions, particularly given we are currently receiving approximately 90% of the revenue under existing agreements,” David said.
“With a 60% majority stake in the project, we are also very well positioned to drive the development of the Wizard Lake Oil Project as the oil market improves. Volatility will likely remain very high in the shorter term, but some cautious optimism in the longer-term oil market fundamentals is emerging again,” he continued.
Whitebark Energy ended the day in the grey, with shares selling for 0.4 cents each.