BRK - Brookside Energy

Long time since the last post but reviving this thread.

Thought it about time to revisit the current value of BRK which is clearly being ignored by the market at this stage.

The below link is interesting for determining potential SWISH value as it shows first hand what is being offered in some locations in the SWISH AOI vicinity (offer made from major oilers direct to lessor):

https://www.mineralrightsforum.com/t/stephens-cty-sec-17-township1s-4w/51611

Various companies are bidding at up to $10k USD per acre (so far) in the sections adjoining SWISH. Noting, this is undrilled,unproven and the offers mentioned are very recent. (Also worth mentioning the offers have not beencounter-offered as yet meaning upon negotiation, the values agreed upon could very well be higher)

Breakingdown BRK assets and liabilities:

SWISH Acres (current) assuming $10k USD per acre x 2000 acres = $20m USD - converted to AUD = ~A$30m.
STACK Acres NPV10 Reserves @ ~A$18m minus ~30% (20-30% discount typical in event of sale) = ~A$12m.
Total Value of assets: ~A$42m.

On top of the above, BRK also own a 17% stake in Black Mesa - Value unknown.

Minus loan facilities:Leasing Facility: ~A$4.2m

Total loans: ~A$4.2m

Total (assets minus loans): ~A$37.8m (or 3.78cps)

Current market cap: $9m

Update:

Brookside has just increased their SCOOP acreage holdings to 2500 acres.

Land just 2 sections north of BRK’s AOI (near Continentals Springboard Project) is getting offers of up to $25,000USD ($36,000) an acre. (UNDEVELOPED) – Check out the Oklahoma Mineral Rights forum for discussion on Stephens County for offers given to land owners.

Brookside’s AOI has plenty of geological data from old wells and BRK got in early thus was able to cherry pick (due to the acreage looking like it was already leased but wasn’t – as soon as the majors found out, they went all out securing everything they could. BRK is onto a winner geo wise)

Brookside just negotiated their way into land swap deals and step-in agreements which has netted approx. 3m back into their bank account this quarter. That’s $3m cash ready to go for new projects for a $10m MC.

Their first fully operated DSU is about to get underway – the Jewell well.

Their strike rate so far on wells (on their land) has been 100% with decent IP flow rates on all wells bar one (which is still in production).

Their maiden reserve report for their 400 STACK acres came in at $18m AUD NPV10.

The Jewell well has the potential to triple their current reserves.

Now before you go and check the 4C – note, this company is NOT a producer and they are not after revenue from wells. They generally allow other companies to come in and drill to keep all the proceeds – they are after one thing: The oil and gas reserves (which in turn increases land value). Once a well is drilled, they are able to calculate the remaining value of the O&G reserves in the ground and revalue the land accordingly. Building value through assets.

Breaking down BRK assets and liabilities:

SWISH Acres (current) assuming just $10k USD per acre (as mentioned, bids up to $25000per acre received in sections just 2 ranges above BRK’s AOI) x 2500 acres = $25m USD - converted to AUD = ~A$36m.

STACK Acres NPV10 Reserves @ ~A$18m minus ~30% (20-30% discount typical in event of sale) = ~A$12m.

Total Value of assets: ~A$48m.

BRK also own a 17% stake in Black Mesa - Value unknown.

Minus loan facilities:

Leasing Facility: ~A$4.2m

***Note the STACK Drilling Joint Venture: ~A$4.8m is NOT a BRK loan when reviewing the presentations***

Total: ~A$43m (or 4.3cps)

Current SP: ~1.0cps

Current market cap: $10m

I am battling to find a chink in BRK’s armor at the moment so if anyone has any reason why the calculations above aren’t on the money, I’d love to hear it.

Even at half the land value ie: $5kUSD per acre, still shows a value of ~$25m AUD or 2.5cps.

Brookside Energy doing well today, up 31.25% to 2.1c. Volume has been much higher than normal since 3 March and the share price has been steadily increasing over the last week.

With oil and gas prices increasing recently, I suspect we may be about to enter a bullish phase for energy as the world starts to shrug off COVID and things get back to business. Demand for energy should increase all through 2021 IMO.

I think we'll see BRK head towards 3c in the short term now that it has broken through 2c.

greggles said:

Brookside Energy doing well today, up 31.25% to 2.1c. Volume has been much higher than normal since 3 March and the share price has been steadily increasing over the last week.

With oil and gas prices increasing recently, I suspect we may be about to enter a bullish phase for energy as the world starts to shrug off COVID and things get back to business. Demand for energy should increase all through 2021 IMO.

I think we'll see BRK head towards 3c in the short term now that it has broken through 2c.

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Wouldn't be surprised if they get another please explain that was only a week ago. Something fishy. It doesn't look like they're waiting for any results??

kennas said:

Wouldn't be surprised if they get another please explain that was only a week ago. Something fishy. It doesn't look like they're waiting for any results??

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Unless I'm missing something, there's no reason for volume to have increased so dramatically on 3 March, and then to have remained high every trading day since then.

The response to the last Please Explain notice was the typical "we know nothing" reply, but the buying over the last week has the odour of insider's buying. I could be wrong, but that's my gut feeling.

Something is definitely up. What exactly that is remains to be seen. But I still think it's going higher in the short term. Trading at 2.2c now.

Stockhead mentioned them recently without any substance;
https://stockhead.com.au/experts/how-to-profit-from-the-biggest-reopening-trade-since-world-war-2/

Microcap pick​

Within his broader macro analysis, Whelan pinpointed an ASX microcap play that looks set to benefit from one of the core trends in the great reopening — oil prices.

“If you don’t own Brookside Energy (ASX:BRK) right now, then you should probably have a really good look at it,” he said.

“It’s a perfect representation of where I’m investing. Oil prices are going up and gas is going up, and I’m rotating into energy.”

“The holdings that BRK has are phenomenal. That’s the stock that’s going to make people a lot of money over the next couple of months.”

kennas said:

Wouldn't be surprised if they get another please explain that was only a week ago. Something fishy. It doesn't look like they're waiting for any results??

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They're about to start drilling on their maiden well in a proven (highly productive) location, surrounded by major players with a very experienced team in Oklahoma (Black Mesa).

First well in a 20 well program.

All announced and the market is speculating on their success hence the volume I'd assume.

Plus it's been an unloved and undervalued stock for quite some time - fair value based on prospective resources, reserve values at NPV10 once developed around $100-$120m at current oil and gas prices. 3-3.5c or there abouts would be fair value based on current assets once the placement shares come into play. (Note, they also own 50% of Black Mesa which is a highly successful acquisition business in itself) BM's value should also be substantial (how much is anyone's guess though).

Things on the cards for the near term:

Jewell well (Maiden well DSU development)
Thelma well behind pipe exploitation
Bradbury unit development
Flames & Rangers DSU development (Very close to Jewell location and again surrounded by majors with impressive flow rates)

There is a lot of news to flow in the next 6 months on this one hence the interest.

Thanks for the summary @Chilledpain - that explains a lot. You obviously know this company very well. Please keep us updated with any further developments.

greggles said:

Thanks for the summary @Chilledpain - that explains a lot. You obviously know this company very well. Please keep us updated with any further developments.

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A DM would be better...

BRK scheduled to spud their Jewell well this week. Lots of ramping all over the place about this stock. Is the hype justified?

One way or another, we'll know very soon.

BRK is now dual listed on the ASX and the Frankfurt Stock Exchange. The Jewell Well is progressing well and they should hopefully be seeing the black stuff soon.

Current Operations

Having set and cemented the surface casing and installed and tested the well head and BOP stack, the Jewell Well was drilled in the vertical section to a depth of ~6,850 feet. During the last 36-hours the drill string was tripped out of the hole and the well was prepared to receive intermediate casing. At ~9pm CDT on Sunday 16 May 2021, operations to set and cement the intermediate casing were successfully completed.

Forward Operations

Trip back into the hole with full bottom hole assembly to drill ahead and build and land the well bore curve in the target formation. Post drilling of the curve, a 73/4” liner will be set prior to commencement of operations to drill the lateral (horizontal) section of the well.

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Video of activities on site at the Jewell Well: https://www.linkedin.com/posts/davi...lgas-energy-activity-6800248407987515392-9Mdy

After hitting a low of 2.2c late last month, the BRK share price has started heading back up this afternoon and looks like it might finish the day at 2.6c, up 13%.

The market is interested in seeing oil from the Jewell well. Today's price action makes me think that the next announcement can't be too far away.

Volume drying up almost completely now for BRK as the Jewell Well is readied for production. The market is waiting on production data such as oil flow rates.

Some good news through this morning for BRK.

US major ExxonMobil, through its subsidiary XTO Energy Inc. (XTO), has elected to participate in the Jewell DSU by taking up its 4.5% Working Interest. Additionally, Citation Oil and Gas Corp. (Citation), one of the largest private oil and gas companies in the United States, has also elected to take up its 2.3% Working Interest. A further 5.7% Working Interest was taken up by a combination of private equity and smaller private oil and gas firms. Participation in the Jewell DSU includes an equivalent Working Interest in the high-impact Jewell 13-12-1S-3W SXH1 well (Jewell Well) plus the opportunity to participate in future wells drilled in this DSU.

Brookside expects to retain as much as a 87% Working Interest in the Jewell DSU, with the Company's subsidiary Black Mesa as the operator.

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This is a big vote of confidence by ExxonMobil in BRK and the Jewell DSU. There is no way ExxonMobil would have come on board if they were not happy with what was happening at the Jewell Well.

The buy side of the market depth is seeing some large bids now. BRK will go much higher this morning and will likely gap up at the open.

BRK back at 3c now and with production at the Jewell Well about to commence we could see this bullish momentum continue once the oil is pumping and flow rates are established.

The news flow should start to increase now. Could be a trading opportunity coming up very soon if the news is good.

greggles said:

BRK back at 3c now and with production at the Jewell Well about to commence we could see this bullish momentum continue once the oil is pumping and flow rates are established.

The news flow should start to increase now. Could be a trading opportunity coming up very soon if the news is good.

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Agreed mate, picking up some steam now. Jewell news should be the catalyst and Rangers should follow very closely after. Great time to be a holder

Pick for August Stock Comp...Might be a good time to get in on Brookside Energy. current price 0.031c after a high of 0.033c this morning, I've picked BRK to come into August with the possibility for a breakout early August. Technically speaking, because as I add insight to the BRK chart, I feel its on its way for the potential for consolidating a cup and handle formation. And Fundamentally they are of sound business structure. Just recently they announced there Investor Presentation, witch was a fine read with a Market Cap $77m. I think it may be going places and have a good session in August.

BRK starting to fire up. The company announced last week that it has raised $9 million through the issue of 300,000,000 FPO shares at 3c a share in a heavily oversubscribed placement. The funds raised "will be used to increase the Company's position in the Rangers Drilling Spacing Unit (DSU) and to fund a majority Working Interest in the development of the Rangers Well in the SWISH AOI."

News flow about to ramp up:

Commenting on the announcement, Brookside Managing Director, David Prentice said:

[...]

“Shareholders and investors can look forward to a considerable amount of news over the coming
weeks and months as we complete the Jewell Well and turn it to sales while at the same time, we lock
in the timetable for the Rangers Well.”

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Proactive Investors BRK update interview with Managing Director David Prentice.

Jewell pad with Liberty on site. Completion underway Impressive video.