Whitebark Energy : Annual Report 2017

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WHITEBARK ENERGY LIMITED (ASX:WBE)‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌ (formerly Transerv Energy Limited) Annual Report 30 June 2017‌‌‌‌

ABN 68 079 432 796‌

Table of Contents

Corporate Directory	3
Chairman's Letter	4
Review of Operations	5
Reserves and Resource Statement	10
Directors' Report	12
Auditors Independence Declaration	21
Independent Audit Report	22
Statement of Profit or Loss and Other Comprehensive Income	27
Statement of Financial Position	28
Statement of Changes in Equity	29
Statement of Cash Flows	30
Notes to the Financial Statements	31
Directors' Declaration	62
Shareholder Information	63
Permits	65

Directors	Charles Morgan (Non-executive Chairman) David Messina (Managing Director) Stephen Keenihan (Executive Director)
Company Secretary	Kevin Hart
Principal registered office in Australia	Level 2 6 Thelma Street West Perth WA 6005 Tel: [phone] Fax: [phone]
Auditors	Grant Thornton Audit Pty Ltd Level 1, 10 Kings Park Road West Perth WA 6005
Solicitors to the Company	Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street, Perth WA 6000
Share Registry	Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth WA 6000 Tel: [phone]
Banker	ANZ
Stock exchange	Whitebark Energy Limited shares are listed on the Australian Securities Exchange (ASX: WBE)
Company website	www.whitebarkenergy.com

Dear Shareholders,

The 2016/2017 financial year was one of transformation for the Company in its operations and business focus, changes which encouraged renaming the Company Whitebark Energy to recognise the new direction.

Activities at the Warro Project, which has been the main focus of the Company for a number of years, have been reduced due to the fact that although the Warro wells produced sustained gas flows with substantial amounts of water, the wells will not be economic with the current combination of gas rates, water rates and well costs. This is further exasperated by the recently declared moratorium on fracking in WA pending the outcome of a "scientific enquiry".

There have been ongoing studies to try and determine how best to access the immense quantities of gas that are contained in the very tight sands. It is possible that in the future, pump assisted production and/or horizontal wells drilled into better zones of porosity may prove to be commercial. However, there is no possibility of any further field work with the current moratorium on fracking in WA.

Subsequently, the Board determined that it would be in the Company's best interest to seek assets that gave the company a balance between production with growth prospects and some higher risk exploration activity.

On 11th July 2016, the Company announced that it had formed a strategic alliance with Norwest Energy Ltd (NWE) to facilitate the farmout and drilling of the Xanadu Prospect in TP-15 in the Perth Basin. Whitebark also acquired 100m shares at $0.002 at this time. The balance of Xanadu was subsequently farmed out and the well was spud on the 4th September 2017. On the 25th September it was announced that Xanadu was an Oil Discovery and we look forward to working with our Joint Venture partners to maximise shareholder value from this excellent result.

On January 11th Whitebark received $9.3 million by successfully qualifying its portion of the Warro Project under the Australian Government Research and Development Tax Incentive Programme.

In November and December the Company appointed a new Managing Director, Mr David Messina and a new Company Secretary, Kevin Hart. I have worked with both these gentlemen for many years and I commend them to you.

The Board would like to thank Stephen Keenihan, who stays on as a director, for the excellent job he did as Managing Director of what was Transerv Energy at the time, and in particular his work in progressing Warro and working with Alcoa.

On April 11, the Company announced that it had signed a binding Term Sheet to invest CAD$5 million for a 20% working interest in Point Loma Resources Ltd's ("Point Loma") operations in Alberta, Canada comprising land, production, underutilised facilities, shut in production, development and exploration. There are also many possibilities for the acquisition of further production in the area. Importantly these assets are positioned in a very active and rich oil and gas province and governed by a regulatory regime that is conducive to maintaining an active and vibrant exploration and production industry

In the course of the year, the Company has completely changed its focus, has already participated in the Xanadu-1 Oil Discovery in Western Australia and is currently participating in a number of workovers and new wells in Canada.

I would like to thank the Board and all in the office for a remarkable effort this year! Yours sincerely,

Charles W Morgan Chairman