Apologies for the delay in responding to your post but am back home now .
I'm not quite sure which technical facts you mean but assume you are referring to the length of casing. If so then that is just simple math. The Woodford , Sycamore formations are ~7500 feet subsurface at the Flames location.... 2 wells are 10,000 foot laterals ( Rocket, Iginla) and 2 wells are 5000 foot laterals ( Maroons,Fleury) which makes ~30,000 feet of vertical section casing, and ~30,000 feet of lateral section casing.
For well production information I access the Oklahoma Tax site, for keeping up to date on specific leases picked up by BRK and competitors I go to the Oklahoma County records site, for keeping an eye on the BRK court applications for DSU's, well spacings, drilling permits and pooling I access the Oklahoma Corporations Commission website. I also ask a lot of questions of David and Gracjan when I need clarification on announcements, presentations or info I research.
For the second question, in all honesty I don't think i will be able to answer to your satisfaction. The original monetisation pathway of selling up the SWISH assets after the initial HBP wells were drilled would have been the " tipping point" for a rerate because there would have been a significant post tax cash injection . It would have been almost certain that the share price would have rerated to reflect that cash pile. ....for example, a hypothetical $150 million net cash from the sale would have mean't ~3 cents per share cash with BRK probably rerating to 3-3.5 cents on the announcement of such a sale.
As monetisation now means BRK staying in and developing the assets, initially solely for the FMDP and then " to be determined" for each of the subsequent DSU's, any rerate will be based on many more parameters.
IMO there are general market hurdles, and company specific hurdles which are affecting the current BRK market valuation, and may inhibit the future valuation.
Firstly for the market , the current sentiment for ASX listed oil and gas producers is generally in the toilet. That means fundamental multiples and ratios like PE, P/EV, P/CF etc have contracted significantly for the sector as a whole, and even more so for small, medium producers....and even more so for BRK on top of that. You will find it difficult to spot a cheaper ASX listed oil and gas stock than BRK on many fundamental ratios. So IMO one thing that will help a rerate of BRK is a reversion back to the mean in terms of market sentiment for oil and gas stocks... especially those that are profitable, low risk, and have obvious growth potential. When, if this happens is anyone's guess.
For company specific factors, you make some good points... if the market hasn't rewarded BRK up to now, why would it reward a situation where it double, triples, quadruples it's well count and subsequent initial production. That is the million dollar question and I can't answer that.
Some other company specific hurdles are too many shares on issue, some confusion surrounding the business model, although now that the company will be focussing on production/ development that should change as ASX investors are more familiar with the model. There is also IMO a perception of the "WA Boys club" combined with the penny stock status that is turning away potential investors, despite the incredibly sound fundamentals.
But, drilling another 20 or so wells( funded by cashflow and possibly JV partners ), will mean a substantial lift in free cash generation and profit on the back of a substantial lift in production. If there is no then there will be a significant further contraction in the already crazy low multiples. At some point, IMO the rubber band will have stretched so far that it will break and the brakes will release... when and how far is again something I can't answer.
Historically, whenever a small oil and gas producer has developed multiple projects successfully, profitably with an increase in production, there was an upward trend in it's share price with each development. I am expecting, hoping that will be the case with the FMDP and beyond. ... but BRK as you said, BRK didn't rerate as each of the 4 current operated wells were successfully drilled and brought on production. The fact they have even either produced as expected ( Rangers, Flames) or out performed( Jewell, Wolf pack) didn't have any sustained market recognition.
I think another possible issue is BRK doesn't have any current ASX listed analogue companies that operate in a similar unconventional space to compare with . ATS is pretty well inactive, SHE is a non operator now focussed in Canada. CE1 sold it's assets for which now is obvious they were not the tier 1 assets the company claimed when they bought them in 2021.
The best Assie example is ironically the ATS precursor company AUT ( Aurora) which was a nearly entrant in the Eagleford Shale in Texas in 2005 and participated in the play making Sugarloaf AOI and initial Sugarcane well which proved the concept. It is a fascinating story which culminated in a US$ 2.6 billion sale in 2014. There are some similarities to BRK, and some very large differences .
I'm absolutely not saying BRK will emulate AUT ( which was at the right place, managed to build a significant position and got out at the right time) but it's worth going through a few of the presentations to see how the asset was acquired, build, proved, developed and sold.
What I think will rerate BRK is not worth a grain of salt, because the share price has not responded in the manner I thought it would up to now. Operationally, the company has exceeded expectations , and historically for other stocks, that has resulted in sustainable share price gains .... but not yet for BRK.
Cheers
Dan
BRK Price at posting:
1.1¢ Sentiment: Buy Disclosure: Held
(20min delay)
