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Whitebark Energy closes rights issue, raises $2.98 million to enhance oil & gas strategy

The company’s Wizard Lake Oilfield facilities in Canada have been upgraded to allow the processing of gas from the Rex-2 and Rex-3 wells.

Whitebark Energy Ltd - Whitebark Energy closes rights issue, raises $2.98 million for working capital
Around 995,279,563 shares will be issued at 3 cents per share

Whitebark Energy Ltd (ASX:WBE) has received strong support from shareholders for an entitlement issue announced in June that has raised A$2.98 million, before costs.

The company will now issue 995,279,563 shares in accordance with the offer timetable with the remaining shortfall of $54,380 expected to be allocated in the next seven days.

Chairman Charles Morgan said: “On behalf of the board I would like to thank the shareholders, underwriters and sub-underwriters for their ongoing support of the company.”

Funds will be used for the acquisition of land mineral leases, Wizard Lake field maintenance and workovers and working capital comprising operational and capital costs accrued and pending.

Adelaide Equity Partners acted as lead manager and Baker Young Ltd as lead underwriter.

Entitlement offer details

Whitebark Energy launched the non-renounceable, pro-rata entitlement offer to existing shareholders to raise up to A$3 million last month, whereby eligible shareholders were able to subscribe for one new share for every three shares they held at the record date, at a subscription price of 3 cents per share.

The indicative offer timetable.

Wizard Lake reserves

The company expects reserves at the Wizard Lake Oilfield in Canada to be upgraded in 2020, with production hitting a peak of 1,800 barrels of oil equivalent per day within 12 months of the first well.

Production costs have fallen to around A$10/barrels of oil.

In the next six months the company, which hiked its working interest in Wizard Lake from 20% to around 85% in 18 months, is targeting 100% interest.

Whitebark owns 100% of the facilities at Wizard Lake, which have been upgraded to allow the processing of gas from the Rex-2 and Rex-3, and to cater for the expansion of a more than 20 well drilling program.

Rex Well maintenance

The company recently proceed with the maintenance of the existing Rex wells to optimise production capacity, resulting in a 276% increase in peak production at Rex-3 over Rex-1.

The extra length of the horizontal section at Rex-3 led to higher oil production rates and larger reserve bookings per well than at Rex-1 and Rex-2.

Rex-3 flowed unassisted until recently when a subsurface pump was added in June to help improve production rates.

The company hopes to replicate Rex-3 for future wells.

Quick facts: Whitebark Energy Ltd

Price: 0.003 AUD

ASX:WBE
Market: ASX
Market Cap: $12.11 m
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Whitebark Energy raising funds to support field development and production...

Whitebark Energy Ltd's (ASX:WBE) David Messina provides an update on the company's Wizard Lake Operations in Canada and the current partially underwritten entitlement issue to raise $A3 million announced last week. These funds will support Wizard Lake improvements and land...

on 6/7/20

2 min read