In an engaging discussion with Tracy Weslosky, Mark Vanry, the President, CEO, and Director of Wedgemount Resources Corp. (CSE: WDGY | OTCQB: WDGRF), provided updates on the company’s ambitious production enhancement efforts. Despite weather-related delays, Wedgemount has nearly completed chemical stimulations on 17 Texas wells, part of a broader strategy to significantly boost oil production. From initial acquisitions producing 31 barrels of oil equivalent per day, the company has surged to 177 barrels, with expectations to further double this output. The completion of service facility optimizations, now 100% done, and the integration of the TCS light oil acquisition, bringing the total to 24 producing wells, underscore the company’s progress.

Vanry also revealed that infrastructure improvements are 95% complete, enhancing oil treatment and sales processes to shorten the working capital cycle from 70 to about 30 days, promising quicker cash flows and shareholder benefits. The appointment of Steve Vanry, a CFO with extensive experience, adds strategic financial oversight as Wedgemount transitions from pre-production to active operation. Looking forward, Vanry anticipates a comprehensive update on production enhancements by the end of Q1, alongside active exploration for additional asset acquisitions, aiming to expand the portfolio by mid-2024. He summarized the company’s position and outlook, expressing excitement about the integration and ramp-up of both new and historical assets.

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About Wedgemount Resources Corp.

Wedgemount Resources is a junior oil & gas company focused on maximizing shareholder value through the acquisition, development and exploitation of natural resource projects in the southern USA.

To learn more about Wedgemount Resources Corp., click here

Disclaimer: Wedgemount Resources Corp. is an advertorial member of InvestorNews Inc.

This interview, which was produced by InvestorNews Inc. (“InvestorNews”), does not contain, nor does it purport to contain, a summary of all material information concerning the Company, including important disclosure and risk factors associated with the Company, its business and an investment in its securities. InvestorNews offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This interview and any transcriptions or reproductions thereof (collectively, this “presentation”) does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities in the Company. The information in this presentation is provided for informational purposes only and may be subject to updating, completion or revision, and except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any information herein. This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. This presentation should not be considered as the giving of investment advice by the Company or any of its directors, officers, agents, employees or advisors. Each person to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. Prospective investors are urged to review the Company’s profile on SedarPlus.ca and to carry out independent investigations in order to determine their interest in investing in the Company.

After announcing the signing of an agreement to acquire “producing”  oil and gas assets in the Permian Basin in December 2022, Wedgemount Resources Corp. (CSE: WDGY | OTCQB: WDGRF) (“Wedgemount”) has rapidly moved into the oil producer category. The Company has also quickly increased barrels of oil equivalent per day (“BOEPD”) production as it implements its growth strategy.

On December 19, 2022, Wedgemount announced the signing of an agreement to acquire “producing” oil and gas assets (known as the Willowbend Light Oil Project) in the Permian Basin of West-Central Texas, North America’s number 1 oil-producing region. Earlier this month, the Company announced production increases from well and formation chemical treatments and then last week announced further gains in production as it “shows” the market it can successfully execute on its plans.

Willowbend Light Oil Project (Texas)

Wedgemount’s Definitive Agreement means that they will acquire a 100% working interest (purchased for US$1.5 million to be paid in installments) in 640 acres including five leases, eleven producing wells, and all surface facilities. At the time of purchase, production from the eleven wells was approximately 25 barrels of oil per day of high quality, low-decline, operated production (and some associated natural gas production). The area’s geology consists of numerous hydrocarbon-producing formations which will also be targeted by the Company giving potential to expand operations in the future.

Production expands rapidly from 25 to 104 barrels of oil equivalent per day, with the potential for a lot more

In February 2023, Wedgemount announced that they had commenced a phase-one field program at the Project to optimize wells and improve production.

Wedgemount CEO Mark Vanry clearly outlined the Company’s strategy:

“Wedgemount is delighted to secure a highly scalable and profitable light oil asset in North America’s most prolific producing hydrocarbon basin. The asset has tremendous production upside potential including low-cost optimization of existing wells, new vertical and horizontal wells, targeting of underdeveloped zones and the implementation of secondary recovery through water-flood. We’re optimistic that together our local partner, we’ll be able to add additional highly prospective targets in the immediate area during calendar 2023.”

Then on February 22, the Company announced its success from its initial work with the rise in barrels of equivalent oil per day to 104 from 25, a 316% increase:

“As of February 16, 2023, the five-day average Willowbend field production was 104 boepd, which represents a significant increase from the Q4 2022 average of 25 boepd.”

From 25 to 104 barrels of oil equivalent per day produced (from the chemical treatments) is an incredible result. And done from treating only 3 of the 11 wells so far, with more to follow. Workovers of the wells infrastructure can improve this further. Wedgemount anticipates well workovers and surface optimizations will commence in April 2023, which Wedgemount is optimistic will continue to add incremental production to the field.

Wedgemount’s CEO Mark Vanry sees further expansion potential later in 2023 and into 2024 stating:

“We’ve mapped 36 million barrels in place and on a primary recovery can probably get 10-12%……..that’s just one of a multitude of these bypass pay zones that will be the real blue sky for Wedgemount….“

The Petrosaurus partnership and its “proprietary oil well chemical treatments” are key competitive advantages for Wedgemount

Effectively Wedgemount is now a rapidly growing small oil producer, albeit with their partner Petrosaurus Inc. who is a San Antonio-based turn-key oil field services operator with over 40 years of track record in central Texas. Petrosaurus has key relationships with landowners and businesses in the area. Petrosaurus’ proprietary oil well chemical treatments are a key component of Wedgemount’s strategy of acquiring and optimizing under-performing conventional light oil assets in central Texas. Wedgemount estimates that it can add oil production by spending US$5,000 per flowing barrel increase and it results in a payback period of fewer than 100 days.

Wedgemount Resources and partner Petrosaurus are working to acquire and improve underperforming oil wells in Texas

^{Source: Wedgemount Twitter}

Petrosauraus’ Senior Operations Manager Heidi Flag and her colleagues have over 40 years of combined experience providing solutions for the oil and gas industry.

Wedgemount’s CEO Mark Vanry has an excellent track record of success with over 20 years of experience in the resources and capital markets sector. In fact, he has personally raised over $2 billion of capital for resource companies which is an exceptional achievement. Wedgemount also has a very experienced team including 2 seasoned geologists. The combined Wedgemount management team has over 75 years of industry experience.

Closing remarks

Wedgemount’s strategy is to acquire and dramatically improve the performance of underperforming oil wells in Texas using modern techniques. Their maiden oil acquisition can potentially provide near-term cash flow as production rapidly ramps using their partnership with Petrosaurus which is producing amazing results. By the end of March 2023, all 11 wells should have received the Petrosaurus chemical treatment, potentially boosting oil production even higher. There is the potential for further upside once the well makeovers are also done and again when work begins on the bypass pay zones later in 2023.

Wedgemount Resources currently trades at a market cap of only C$6 million.

I always like a story where a hard-working, knowledgeable management team sets its nose to the grindstone to try and eke out a decent return for shareholders, and then almost overnight the world changes and you’re one of the hottest stocks out there. Often times it has to do with finding something unexpected with the drill bit that changes the fortunes of the company. However, in this case, it was a commodity price that had languished for years but in the last six months has almost doubled. I’m talking about Henry Hub natural gas prices and if you look back a few weeks it hit a peak of 150% over where it started the year. The Sprott Physical Uranium Trust (TSX: U.UN) wishes it could have that kind of influence on prices. Unfortunately, it was a much larger event that has impacted natural gas prices, along with plenty of other commodities.

Source: StockCharts.com

Even though almost every natural gas leveraged company has seen a great run, the additional bonus for Southern Energy Corp. (TSXV: SOU) is the location of its assets. As a natural gas exploration and production company with its primary focus on acquiring and developing conventional natural gas and light oil resources in the southeast Gulf States of Mississippi, Louisiana, and East Texas, it’s close to most of the U.S. LNG export capacity (even after the Freeport LNG facility, which provides about 20% of US LNG processing, tried to blow itself up). Albeit the Freeport LNG explosion actually caused U.S. gas prices to fall from their lofty heights as a result of 2 bcf/d or a little over 2% of demand for U.S. natural gas having been abruptly eliminated. Nevertheless, as the rest of the world becomes a little less stable, being close to export infrastructure should ultimately be a good thing, in my opinion.

For Southern, its assets in Mississippi are characterized by a stable, low‐decline production base, a significant low‐risk drilling inventory and strategic access to the best commodity pricing in North America. Southern’s mission is to build a socially responsible and environmentally conscious natural gas and light oil company in the Southeast Gulf States. In these areas, Southern has access to major pipelines, significant Company‐owned infrastructure, year‐round access to drill, and the ability to shift focus between natural gas or crude oil development as commodity prices fluctuate; all factors that contribute to mitigating corporate risk.

Another factor that will mitigate corporate risk is the recently announced successful completion of a US$31 million equity financing, of which US$12.5 million came from strong demand in the U.K. Another indication that Europe is worried about its natural gas supply and Southern is located in a great place to help support that demand. Net proceeds of the Offering will primarily be used to accelerate the initiation of a continuous organic drilling program at Gwinville, where the Company operates and owns an average 96.7% working interest in approximately 12,000 acres. The Gwinville property represents about 53% of the company’s Proved plus Probable (2P) reserves, and approximately 23% of Southern’s 2021 average production.

At the end of Q1, corporate production stood at 11,515 Mcfe/d of 92% natural gas. Although I would anticipate production to start moving higher as Southern rig released two (2.0 net) wells of the three well program at Gwinville in Q1 2022 with the third well rig released in April 2022. In May 2022, completion operations began on the three‐well horizontal padsite. The first well to begin flowback following the stimulation was the GH 19‐3 #3 well, which came on‐line on May 25, 2022. The GH 19‐3 #2 and GH 19‐3 #4 wells are expected to be on‐line shortly, and the Company is looking forward to providing initial production results in the coming weeks. This may not have a lot of impact on Q2 results but it certainly sets the table for Q3.

The recently completed capital raise by Southern puts the Company on solid footing to start expanding production and take advantage of the best natural gas prices in over a decade. Production assets are ideally located for maximizing corporate netbacks and an experienced and successful management team, with a history of creating shareholder value together, bodes well for the future of Southern Energy. Subsequent to the closing of the latest share issuance (expected July 7^th) the Company will have a market cap of roughly C$105 million (based on yesterday’s closing price) and US$31 million to try and make that market cap grow.