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Whitebark Energy starts commercial oil production at Wizard Lake after constructing pipeline and process facility

The company plans to stabilise flows at the Rex-1 well before it begins to drill two new wells in the second half of 2019.

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Whitebark has a clear strategy for driving production growth and rapidly developing the Wizard oil pool

Whitebark Energy Ltd (ASX:WBE) has begun commercial oil production from the Rex-1 well at its Wizard Lake Project in Canada after completion of production facilities and a pipeline.

Pumping began overnight with fluids now flowing into the series of tanks at the production facility for water removal and transportation to a nearby refinery.

The new central production and processing facility is 1.6 kilometres from Rex-1 and has the capacity to service additional wells through the addition of further tank modules.

 

Whitebark managing director David Messina said first commercial oil production at Wizard Lake was a key milestone in the company’s strategy to drive production and reserve growth in its Alberta-based acreage.

He said: “Not only have we successfully increased our production and reserves position, we have also demonstrated our ability to bring wells onto production quickly and at a low capital cost.

“This is very important given the reserves update identified 12 to 17 likely well locations at Wizard Lake.”

READ: Whitebark Energy to increase interest to 50% at Wizard Lake development

The funded 2019 development program at Wizard Lake comprises construction of pipeline and production facilities on a multi-well pad, as well as the drilling of two new Wizard Lake wells in second half 2019.

Whitebark’s working interest in the Wizard Lake oil development will increase up to 50% after the two-well drilling program and reserves assessment indicates the likelihood of 12-17 follow-up well locations.

The company expects Rex-1 will take several weeks to clean up and for the oil cut to stabilise.

To remove any associate water, the company is using a low-cost modular separation technique which is being adopted throughout the region.

This method uses a series of tanks and gas derived from the well to heat the emulsion and separate out the water.

Wizard Lake's development plan

 

READ: Whitebark Energy begins work on production facilities at Wizard Lake joint oil project

Messina added: “With production now up and running, we can turn our full attention to the drilling of Rex-2, where we have recently increased our working interest to 40% on the completion of the well.

“A successful Rex-2 outcome should put the company in a very strong position to internally fund the development of the remaining wells at Wizard Lake given the low drilling and development costs in Canada.”

READ: Whitebark Energy secures funds from strategic investor at a premium

The Wizard Lake Rex well was spud on November 24 last year and began clean-up flows in late December after a 270stage fracture stimulation program.

Initial flow testing of the horizontal oil well recorded production rates of more than 300 barrels of oil per day.

Once reconciliation of hydrocarbons produced from the January 2019 flow test was completed in January, total oil produced from the 16-day flow test increased from 1,833 barrels to 2,845 barrels of oil.

The company believes the 55% increase in total testing volumes would likely mean daily production when brought online will be higher than initially forecast.

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