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Whitebark Energy names Albertan oil prospects as it focuses on Canadian portfolio

The company recently collected $2 million cash from a WA oil asset sale.
Canadian flag
O Canada’s a sweet spot for spudding

Whitebark Energy Ltd (ASX:WBE) and joint venture partner Point Loma Resources Ltd (CVE:PLX, FRA: 2LP, OTCMKTS:FMTNF) hope to spud two high-impact exploration wells this quarter after the Australian company narrowed its immediate focus to Canada.

The two wells at Point Loma project in the Canadian province of Alberta are targeting 70 million barrels of oil equivalent (BOE).

West Perth company Whitebark reported today the Rex sands horizontal exploration well would be spudded within 30 days while the permitted Wildwood exploration well was licensed for drilling in December 2018.

Two Well Drilling Program Targets 70 million BOE — https://t.co/UWsTostj1x pic.twitter.com/tT9aE7nRB4

Whitebark Energy managing director David Messina said, “We are very pleased to be able to finish the year with a drilling campaign which with any level of success will significantly increase production and reserves and move the company towards being cashflow positive at a group level.”

The explorer and producer sold out of its Xanadu project in Western Australia for $5 million so it could focus on its Canadian portfolio of projects

Whitebark’s MD Messina spoke to Proactive Investors’ Stocktube channel last month, saying the company’s decision to divest of the “exciting” Western Australian Xanadu project where it found oil with joint ventures partners was not about the project or its size.

Messina said, “It wasn’t about the field, it really is about timing and where we can expect returns.

“We’ve got $4.5 million in the bank now and more coming — it’s not a huge amount of money but it can go a long way in Canada, a lot further than it can here in Australia and certainly Western Australia.”

 

Whitebark can continue to benefit from its Xanadu divestment to Triangle Energy (Global) Ltd (ASX:TEG) through the stock it holds in the buyer and from performance payments on first commercial oil production.

Messina highlighted Whitebark had held onto the early-stage asset long enough to ensure it would benefit both from its future development and the $2 million upfront capital its sale freed up.

Whitebark also received a 5% or 11,191,052-share stake in Triangle as part of the initial transaction.

Whitebark’s stake in Triangle which raised $1.25 million in a placement announced today was worth $760,991.54 at the Xanadu buyer’s 6.8-cent closing price today.

READ: Whitebark Energy sells Xanadu oil discovery for $5 million, retains first oil bonus

Messina said, “(Whitebark) just believed because we have the option of deploying capital into Canada, whereby we can permit and drill a well within two months, that it’s better use of what is limited capital within the junior oil-and-gas end of the market

“That it is better capital for us to deploy into projects that will just return us an outcome in a much quicker time frame.”

READ: Whitebark Energy welcomes plan to build C$40 billion LNG export terminal in Canada

Whitebark is thinking ahead to its plans for the next 18 months.

Messina said, “Over the next six to nine months, both production will increase, with our drilling program, and also as we start to drill these exploration opportunities up, obviously it starts to materially-change the size of the company.”

Whitebark has a market capitalisation of $3.15 million.

The company’s securities closed up 0.2 cents, or 100%, to 0.4 cents today.

— With Ky Chow

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