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Whitebark Energy stays prudent and reins in project expansion plan

Whitebark's wholly-owned subsidiary Salt Bush Energy Limited (SBE) has decided not to acquire the residual 40% of the Wizard Lake Oilfield.

Whitebark Energy Ltd - Whitebark Energy stays prudent and reins in project expansion plan
Whitebark is taking measures to survive the low oil price environment

Whitebark Energy Ltd (ASX:WBE) in line with recent strategy updates to remain sustainable will not acquire the residual 40% in the Wizard Lake Oilfield in Canada.

The company, through a subsidiary, owns 60% of Wizard Lake and was able to increase the ownership in stages to 100% under and agreement.

Due to the current market environment, Whitebark has served notice to terminate the agreement and will remain with a 60% interest.

Whitebark still receives 85-100% of field income

Due to ongoing payback arrangements associated with the 2019 farm-in agreement and Wizard Lake joint operating agreement, Whitebark's subsidiary will continue to receive 85-100% of field income until all pro-rata past costs are recovered.

Furthermore, under existing agreements, Whitebark has a first right of refusal on any sale of the 40% interest it does not own.

Whitebark's managing director David Messina said: “The market has changed materially over the last two months and while our focus remains on Wizard Lake, it is clearly not the time to undertake this transaction.”

Recent cost-cuts to remain sustainable

Last week, Whitebark revealed it was combating low oil prices and the COVID-19 pandemic by cutting overhead costs.

Cuts included reducing directors’ fees and salaries by 50%.

Quick facts: Whitebark Energy Ltd

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ASX:WBE
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Market Cap: $18.15 m
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