The lease is for an initial term of 18 months, during which SBE has the option to drill a well which would extend the term of the agreement to three years after which time the mineral rights are held by production.
The total consideration for the lease is C$238,085, comprising an upfront payment of C$113,363, and a further C$124,722 due at the end of the initial 18-month term.
Rebound in oil prices
The oil price has doubled since April as OPEC+ cuts trimmed a global glut and demand staged a rebound after the easing of restrictions in some countries, particularly China.
SBE continues to receive 100% of production from Rex-1 until payout and has an entitlement to 85% of production in Rex-2 and 3 until payout.
SBE continues to hold 100% working interest in all facilities, pipelines, and infrastructure and 60 to 100% working interest in the mineral rights (varies by section).
Whitebark managing director David Messina said “Whitebark is pleased to have renewed its tenure over a major part of the Wizard Lake Oilfield.
“With the rebound in oil prices, Whitebark is working on increasing its production from the existing three wells and to financing the Rex-4 well.”