Whitebark Energy Ltd’s (ASX:WBE) Canadian subsidiary Salt Bush Energy (SBE) has renewed the mineral lease over a 256-hectare section of Wizard Lake Oilfield (WLO), which will result in Whitebark’s average interest in WLO oil and gas rights increasing to 87.5% from 84%.
The renewal is pending the outcome of a Right of First Refusal (ROFR) for Whitebark’s joint venture partner which the company expects will not participate.
“Increasing working interest”
SBE now receives 100% of production from Rex-1 until payout, 85% of Rex-2 and 96.6% of Rex-3 until payout.
Ownership of the individual sections in the field ranges from 60% to 100% and the company continues to own 100% of the facilities and associated pipelines and operates the field.
Whitebark managing director David Messina said: “The Wizard Lake Oilfield has been the driver behind Whitebark’s growth in production and reserves over the last 18 months.
“In this period we have continued to invest in both the development of the field and in cost-effectively increasing our working interest from around 30% to 87.5%.”
During the September quarter, the company focused on optimising production from Wizard Lake as the oil price recovers and stabilises.
A turnaround (annual shutdown and maintenance) on facilities was undertaken and components were upgraded or replaced as required and a cleanout was undertaken on Rex-2 to remove a sand blockage.
The company recorded production levels for the quarter of 17,460 barrels of oil and 114,574 mcf gas equating to 36,556 barrels of oil equivalent (similar to 37,797 barrels of oil equivalent in the previous period even with interruptions).
Production from Rex-1 and 3 is recovering after the recent turnaround and production from Rex-2 continues to increase post the recent clean-out work.
The company anticipates production rates will increase and stabilise in the next 30-45 days and this will be the basis for the winter production cycle.
Whitebark notes that, while oil prices have rebounded from the unprecedented lows experienced in quarter two to around WTI US$40/barrels, further drilling work at Wizard Oilfield remains suspended until financial conditions allow.