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Whitebark Energy, Conflux kick Canadian oil project back into play

Conflux Energy has kickstarted the oil rig at its Wizard Lake project in Canada where it has a joint venture with Whitebark Energy.

Whitebark Energy’s (ASX: WBE) renewable energy plans could be in line for a timely cash injection after Conflux Energy confirmed it had kicked their Wizard Lake oil and gas joint venture in Canada back into production.

The company, which has a free-carried 10 per cent slice of Wizard Lake, is pushing ahead with its aim to produce hydrogen from geothermal energy at a range of prospective Australian projects.

Whitebark recently sold a 90 per cent stake in its Alberta-based Wizard Lake hydrocarbon project to Conflux, which agreed to assume all outstanding liabilities and free-carry its partner with the required expenditure to bring the operation back into production.

Conflux confirmed this morning that it had relaunched production at the Rex-1 and Rex-2 wells and Rex-3 is also expected to be producing within the next two days.

The project is pumping out a stable output of about 120 barrels (BBL) per day of oil and 120 barrels of oil equivalent (BOE) of gas. Rex-3 was previously producing between 100 BBL and 150 BOE per day.

The expected cash flows from Whitebark’s 10 per cent interest will assist the company to progress its local geothermal projects. A recent $500,000 placement to institutional and sophisticated investors will also aid the push, in addition to a just-announced share purchase plan that it hopes will raise a further $1 million.

The plan, offering existing investors the opportunity to purchase one share for every three held, is priced at 1.2c per unit and comes with a free “gift-wrapped” option exercisable at 3c.

The successful return to production of Wizard Lake represents further validation of the Company’s long-term partnership with Conflux and broader corporate strategy. With Rex-1 and Rex-2 wells online, we are optimistic about further increasing production and the impact it will have on our ability to deliver on our ambitious renewable energy growth agenda.
Whitebark Energy Chairman Mark Lindh

The company’s core focus remains on its renewable energy projects and it is conducting geological modelling and resource assessment as it strives for final investment decision (FID) approval for the first of its three intriguing projects.

Its 100 per cent-owned Geothermal to Hydrogen project, about 100km west of the town of Windorah in south-west Queensland and comprising an area of 589 square kilometres, is currently Whitebark’s main aim. It has local infrastructure and energy end-users nearby, in addition to the opportunity to support local green hydrogen production, and it falls within the Northern Australia Industry Fund (NAIF) region that is available for funding.

The company is aiming to develop Australia’s first geothermal energy-to-hydrogen project at its Queensland ground and is pushing towards a FID in the first half of next year. Management says the project represents a significant milestone within Australia and will validate its use of the “earth’s heat energy” being used to produce hydrogen.

Whitebark believes geothermal energy deserves greater recognition from both the Australian Government and industry as a reliable source of baseload power – in line with the global perception of its dependability. Similar projects internationally are being successfully commissioned as the global push for reliable renewables motors along.

And Whitebark's decision to reduce exposure to its hydrocarbon project and fully focus its energy on renewables may just help power its geothermal plans forward.

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