Everything with the Rex has gone very well.
I do expect the production cost for the Rex oil to be much less than $30 a barrel. As the refinery is less than 30 kms away.
Rex can’t be compared to current production as that is gas dominant and gas is pretty well unprofitable in Alberta. This could change when the new pipeline and gas export terminal is built but that is years away.
The 50% thicker reservoir at this location could turn out to be very significant, both for flow rates and total deliverable oil production, but unknowable at this stage. Maybe some hints when the report arrives in about a month into the size of the resource in Rex.
The big value driver is how quickly more wells can be drilled and brought into production. If they can bring on a new Rex every two months we will be pushing 2 cents very soon.
It may be that they do multiple wells from the same pad, that would really speed development up.
They have plenty of cash at the moment and very poor cash flow, not sure how much money PLX has and they have been financing 80% of all developments, maybe WBE will pick up another 10% to help speed up development.
And they still have another oil dominant wildcat to drill.
With a MC of $6 there is a lot of blue sky out there if the flow rates of the new wells keep abreast of Rex’s promise.
Finding a new oil field is a great thing to do and WBE’s share price has barely moved.
Good luck holders, heaps of news to come.
Saltbus
WBE Price at posting:
0.4¢ Sentiment: Buy Disclosure: Held
