Whitebark to kickstart Rex-3 production

CANADA-focussed Whitebark Energy will restart production at its Rex-3 well once it installs a subsurface pump in the well at its Wizard Lake tenement in Alberta.
Whitebark to kickstart Rex-3 production Whitebark to kickstart Rex-3 production Whitebark to kickstart Rex-3 production Whitebark to kickstart Rex-3 production Whitebark to kickstart Rex-3 production

Mark Tilly

Journalist

Mark Tilly

Rex-3 was drilled and completed in December and has flowed unassisted since production started in January; yielding 35,800 barrels of oil and 251,000 cubic feet of gas. 

"It was a very pleasant bonus that Rex-3 flowed unassisted for such an extended period," managing director David Messina said. 

"The energy exhibited by the well confirms the excellent quality of the reservoir encountered by the well and reinforces the company's decision to continue its development activities at the field."  

Whitebark said a normal rod-driven pump will be installed in the well at a depth near the reservoir section to provide the required lift to bring the well fluids to surface so production can continue. 

The running of the pump will be done along with other routine maintenance activities and is expected to start this weekend and take seven to 10 days to complete. 

Messina said despite the excellent results from Rex-3, Whitebark had experienced a "frustrating" start to the 2020.

To weather the oil price crash, Whitebark cut its daily output from two wells, Rex-1 and Rex-2, as the Brent oil price dived to decade lows and West Texas Intermediate briefly dipped into negative territory. 

It also made drastic cuts to its operational expenditure, and was producing oil at a cost of C$10/bbl.

On that note, to preserve existing cash, Whitebark said it has obtained a short-term unsecured loan for A$200,000 from company chairman Chrales Morgan and Corporate advisers Adelaide Equity Partners Limited via its nominee. 

The loan has a 10% per annum interest rate and is to be repaid prior to December 31, 2020. 

Messina emphasised the company was now generating positive cash flow thanks to the stablisation of oil prices and its low operating cost structure. 

"Going forward, we will continue to focus on lifting production from our base in May of approximately 200 barrels of oil per day to 350-400bopd in July and start to realise the due reward from the investment that has been made."

Whitebark is trading steady at 0.5c