Production and Cash FlowFurther Important Catalysts for Increasing Per Acre ValuesPerth, Western Australia – 21 February 2018 - Brookside Energy Limited (ASX: BRK)(Brookside or the Company) is pleased to provide an update on production andestimated cash flow coming from its holdings in the Anadarko Basin plays in Oklahoma.
• Net production currently running at ~300 BOE per dayi
o Expected to generate net cash flow of ~US$2,000,000 over the next 12
monthsii
• 100% of this net cash flow will be available to fund drilling and completion
costs associated with the next series of ‘initial wells’ within the acreageiii
costs associated with the next series of ‘initial wells’ within the acreageiii
• Production is expected to reach ~1,000 BOE per day via contributions from
Brookside’s interest in a further 14 wells that are already drilling, being
completed or currently permittediv
Brookside’s interest in a further 14 wells that are already drilling, being
completed or currently permittediv
• Net cash flow recycle rate points to average pay-out period of ~2 years on
wells currently in production
wells currently in production
• The average EUR for wells currently in production is ~1,300,000 BOE, above
Brookside’s ~1,000,000 BOE initial estimate for this part of the STACK Playv
Brookside’s ~1,000,000 BOE initial estimate for this part of the STACK Playv
• Results achieved to-date provide a strong endorsement of Brookside’s
business model, to build an inventory of high quality oil and gas reserves and
ultimately increase value per leasehold acre
business model, to build an inventory of high quality oil and gas reserves and
ultimately increase value per leasehold acre
• Strong, sustained production rates drive larger reserves per well, which in turn
drives higher leasehold acreage values and importantly, Brookside is able to
book 100% of the PUD reserves associated with these initial wells
drives higher leasehold acreage values and importantly, Brookside is able to
book 100% of the PUD reserves associated with these initial wells
• Tier-one operators active in the Anadarko Basin plays are already conducting
increased density pilots with as many 10 wells per development unit and in
some cases they are flagging up to 15 wells per development unit
increased density pilots with as many 10 wells per development unit and in
some cases they are flagging up to 15 wells per development unit
Brookside is very pleased to report that oil and gas sales have been established on thefirst nine wells (predominantly non-operated Working Interest wells) drilled within itsSTACK leasehold focus area, the world-class Anadarko Basin in Oklahoma.Net production (net to Brookside’s Working Interest and net of royalties) has steadilyramped up from May 2017 (when first sales were established) to current levels of ~300BOE per day.
Importantly, 100% of the net cash flow (which is attributable to wells funded via the Drilling Joint Venture) will be recycled and drawn down to fund drilling and completion expenses for the next series of ‘initial wells’ held within the Company’s portfolio.
This is central to Brookside’s business model as it provides an off-balance sheet source of capital for drilling and completion costs associated with the next series of ‘initial wells’ in currently undrilled development units and enables Brookside to ‘book’ 100% of the Proved Undeveloped or PUD reserves for the undrilled infill wells. It should be noted that, tier-one operators that are active in the Anadarko Basin plays are already conducting increased density pilots with as many as 10 wells per development unit and in some cases they are flagging up to 15 wells per development unit.
The net cash flow recycle rate (an important metric for the Company) points to an average pay-out period of ~2 years on wells currently in production. This is a very strong endorsement of the quality of the Proved Developed Producing or PDP oil and gas reserves for these wells.
Estimated Ultimate Recoveries or EUR’s for the wells currently in production are
averaging ~1,300,000 BOE, significantly higher than the Company’s ~1,000,000 BOE estimate for this part of the STACK Play.
averaging ~1,300,000 BOE, significantly higher than the Company’s ~1,000,000 BOE estimate for this part of the STACK Play.
Commenting on this announcement, Brookside Managing Director, David Prentice said;
"Establishing production and cash flow is a very important milestone for the
Company. We are very pleased with the productivity of these initial wells. The
Company. We are very pleased with the productivity of these initial wells. The
results confirm our view that Anadarko Basin plays are truly world-class and that they sit comfortably alongside the Permian Plays as the very best on-shore resource plays in the US."
"Strong production rates drive larger reserves per well, which in turn drives higher leasehold acreage values. These results, together with the success that the tier-one operators are having with increased density pilots, are very strong endorsements of our business model. We are looking forward to keeping our shareholders informed as we bring new wells on-line and continue to ramp-up production toward 1,000 BOE per day". ---
F
/Public Release. This material from the originating organization/author(s) may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).
