Working Interest in Wizard Lake up from 20% to 100% in 18 months

(Dec 2018 to June 2020)

Drilling Operations

The primary focus of the JV has been on the development and optimisation of existing oil pools. A disciplined and pragmatic technical approach in nearby areas has uncovered robust exploration potential. The Wizard Lake Rex Oil Discovery is now in development and focussed on the Rex (Upper Mannville) oil play. The successful drilling and testing of the first Wizard Lake Rex-1 well re-directed the focus to the continued development of the Rex field as outlined below.

Wizard Lake Rex – Rex-1 Oil Discovery

The Wizard Lake Rex well was spud on the 24 November 2018 and, following a 27 stage fracture stimulation program, the well commenced clean-up flows on December 24th. Initial flow testing of the Wizard Lake Rex horizontal oil well recorded production rates of more than 300 barrels of oil per day.

Rex-2 Development Well

Rex-2 was drilled and completed in August 2019.  A successful 35 stage frac placing over 1000 tonnes of proppant into the Rex formation was announced on 26 August 2019 and flowback and testing commenced shortly after. Steadily increasing production rates in Rex-2  during the test period enabled commercial production to be established for the well. Final 24 hour testing flow rates averaged 700 boepd.

Rex-3 – Development Well

Rex-3 was successfully drilled to 3673m total length in eight (8) drilling days from spud on 17 November 2019. The planned Rex-3 horizontal leg of 1800m (Rex-1 hz = 1237m, Rex-2 hz = 1500) was extended 298m due to the presence of a continuous reservoir while drilling to the toe. The well encountered excellent quality reservoir with free oil noted on the shakers, oil shows (fluorescence and cut) and elevated gas readings when drilled. Elevated porosity levels ranging up to 23% were also recorded through the sand (Rex-1: 15-18%, Rex-2 – up to 21%).

A successful 46 stage fracture stimulation program was completed in just over 30 hours during December 2019. The 46 stage frac programme placed over 1300 tonnes of proppant into the Rex formation and used sliding frac sleeves to isolate each zone.

Pump assisted cleanup flows of Rex-3 commenced on 12 December with average rates of 1084 bopd and 1.16 mmcfgd. As expected, the extra length of the horizontal section at Rex-3  led to higher oil production rates and larger reserve bookings for Rex-3 than at Rex-1 and Rex-2.

As announced on 7 January 2020, Rex-3 flowed oil and gas to surface unassisted. At that time, approximately 30% of the frac fluid had been recovered. The well flowed through an 11.91mm choke to restrain the gas rate to approximately 2 mmcfd and ensure the well could clean up in an optimal manner. Flowing 350 to 450 bopd under this heavy choke, the well continued to clean up with a total water cut of approximately 35%.

Facilities and Pipeline

A new pipeline, commissioned as a result of the excellent results from Rex-2, commenced construction on 1 November 2019 and was completed in late December 2019. Whitebark also acquired a key 4.7km pipeline securing access to a pipeline gathering system and gas plant operated by Petrus Resources 14km to the northwest, to which Wizard gas is transported for processing and sales.

The new facilities upgrade work commenced 6 November and was completed and commissioned with the new pipeline in late December 2019[2]. The facilities separate the gas from the liquids for sales via the Petrus gas processing facilities. Gas throughput at this stage was held at 2 – 2.5 mmcfd as the wells continued to clean-up and stabilise. Oil throughput uses a heated cascade tank system which uses gravity to separate the oil and water. This system removes up to 99.5% of the water prior to the oil being trucked to receiving stations[3]. The new expanded facilities are capable of handling 5,000 barrels of fluid a day along with 5mmcfd of gas. Oil will continue to be trucked to market while gas is sent through the newly constructed gas pipeline to the nearby Petrus operated gas processing facility and then on to market.

Production Rate – Dec 31 2020

Production for the half year ended 31 December 2020 was 67,192 bbls oil and 229,463 mcf gas which averaged 163 bbls of oil per day and 1,257 mcf/d gas, equating to approximately 365 boe/d.

SBE receives 100% of production from Rex-1, Rex-2 and Rex-3, and holds 100% WI in all facilities, pipelines and infrastructure.