Whitebark Energy Limited (ASX: WBE) announced a 70% increase in its 2P oil reserves at Wizard lake oil pool in Canada. Net reserves at the site (incorporating the Rex Discovery well) were assessed by McDaniel & Associates. Proved reserves 1P was reported at 132,000 bbls and proved plus probable reserves 2P was reported at 225,000 bbls.
These numbers have been generated as part of the annual reporting requirement for the Canadian Partner Point Loma Resources Ltd. The company highlighted that this process only addresses the reserves immediately adjacent to the discovery well and ignores reserves present at more than 800 meters from the discovery well.
Further, the McDaniel assessment has allocated proved and probable gross reserves of 150,000bbls (45,000bbls net to WBE) to each of 4 well locations adjacent to the discovery well (3 Proven undeveloped (PUD) and 1 Probable location).
The well spacing adopted in the assessment has revealed the possibility for another 12 well locations in the field. This would potentially triple the follow up well locations in the field. The position of two well locations are presently under consideration by the Joint Venture, and the drilling is expected to commence mid-year.
The Company’s Managing Director Mr. David Messina stated that the increase in the reserve estimates within the very short test period has encouraged them to move forward with additional drilling plans for this year.
The McDaniel report has considered McDaniel’s commodity price forecast, inflation rate and foreign exchange rate assumptions as on 31 December 2017.
As per company’s price forecast assumptions, the WTI Crude Oil is expected to hit a price of $US73.10/bbl by the year 2023 vs. $US56.50/bbl in the year 2019, and Edmonton Crude Oil is expected to hit $Cdn85.10/bbl in 2023 vs. $Cdn63.30/bbl in 2019.
In estimating the future net revenues, general and administrative expenses, other debt service charges or provision for interest costs has not been included. The Inflation rate of 2% pa has been accounted for. Also, the company stated that all the proposed wells are analysed for commercial viability and only those deemed commercial were included in the reserves estimation.
In the previous announcement, WBE’s production revenue for the half year was reported at $1,013,432 whereas the total comprehensive loss for the half year was reported at $636,924. Exploration costs & Drilling expenses amounted to $57,408 and $934,851 respectively for the half-year period.
The company reported its 1HFY19 results, revenue for the reported period came in at $1,013,433 vs. $633,624 in 1HFY18. Loss after income tax expense for 1HFY19 came in at $677,267 vs. $3,077,893 in 1HFY18. Details on the December Quarter release could be read here.
On stock information, Whitebark Energy’s share price remained unchanged at $0.004 (as on 15 March 2019) as compared to its previous day close. The market capitalization of WBE stands at ~$6.29 Mn. Its 52 weeks high has been noted at $0.009 and 52 weeks low at $0.002. Its absolute return for five years, one year, and six months are -75.58%, -57.14%, and 33.33% respectively.
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