SYDNEY, AUSTRALIA: Whitebark Energy Limited (ASX:WBE) has announced the sale of a 90% working interest in its Wizard Lake oil field assets in Alberta, Canada, to Conflux Energy Corp.

The deal, which was facilitated through a Purchase and Sale Agreement (PSA), will see Whitebark’s subsidiary, Rex Energy Limited, retain a 10% working interest.

As part of the agreement, Conflux Energy has agreed to provide a “free carry” for the initial capital required to resume full production at the Wizard Lake site, which has been offline since January due to severe weather and operational challenges. This arrangement is expected to yield a positive cash return for Whitebark once the field is fully operational and managed by Canadian personnel.

The transaction also includes the transfer of all contingent liabilities amounting to CAD $1.44 million from Rex Energy to Conflux, along with an option for Conflux to purchase the remaining 10% interest. The price for this potential acquisition will be determined based on an Independent Third-Party reserve report, focusing on the Total Proved Net Present Value (NPV) at a 10% discount rate.

This partial divestiture underscores Whitebark’s commitment to the Australian Renewable Energy market, allowing the company to redirect resources towards the development of its geothermal, hydrogen assets, and the Warro Asset. The company aims to support Australia’s decarbonization efforts and meet the growing demand for green energy.

Mark Lindh, Chairman of Whitebark, expressed that the Wizard Lake transaction aligns with the company’s renewed strategy in renewable energy, particularly geothermal and green hydrogen projects. He emphasized the importance of reallocating capital and efforts to domestic renewable energy development, positioning Whitebark to become Australia’s first commercial geothermal producer.

Whitebark has laid out a focused strategy for asset development and acquisition, targeting sites close to markets, emerging renewable energy sources with high demand, commercially viable opportunities with near-term cash flow, and assets with historical data supporting their geothermal potential.

The Wizard Lake assets, managed by Rex Energy, cover a 26km² tenement package in the prolific Western Canada Sedimentary Basin. Whitebark has previously operated four production wells and identified four additional locations for future exploration. In FY23, the Wizard Lake Oil Field produced over 53,000 barrels of oil equivalent.

Sayer Energy Advisors, a financial advisory firm based in Calgary, provided counsel to Whitebark for this transaction. The company’s strategic pivot towards renewable energy is poised to capitalize on the anticipated demand and contribute to Australia’s green energy transition.