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BROOKSIDE ENERGY LIMITED - Corporate Spotlight

Brookside uses a real estate development approach to build value for its shareholders by... Brookside uses a real estate development approach to build value for its shareholders by acquiring and developing oil and gas assets in OklahomaMore

Corporate Spotlight

Brookside uses a real estate development approach to build value for its shareholders by acquiring and developing oil and gas assets in Oklahoma
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Investor Update with David Prentice - July

VIDEOS

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Investor Updates with David Prentice, CEO Brookside Energy - July 2020



Investor Updates with David Prentice, CEO Brookside Energy - 26th June 2020







JV TO EXPAND OKLAHOMA PORTFOLIO

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Joint Venture to Expand Oklahoma Portfolio Responding to the Macro Opportunity

ASX Release 10th June 2020


Perth, Western Australia – June 10, 2020 - Brookside Energy Limited (ASX:BRK) (Brookside) and Stonehorse Energy Limited (ASX: SHE) (Stonehorse), together, (the Companies), are very pleased to announce the formation of a new Joint Venture (Orion Project) which will enable the Companies to exploit opportunities to acquire producing oil and gas properties in the world-class Anadarko Basin, Oklahoma.


HIGHLIGHTS

  • ●  The Orion Project is a 50/50 joint venture between the Companies, with Brookside’s subsidiary, Black Mesa Energy, LLC responsible for identifying, acquiring and operating the properties on behalf of the joint venture1

  • ●  The joint venture will target natural gas weighted, mature long-life production assets with very low terminal decline and upside that can be unlocked from remedial workover activity and/or unexploited or underexploited behind pipe or deeper productive zones

  • ●  The Orion Project offers significant scalability, with the initial focus area extending over 1,100 square kilometres in the Anadarko Basin, covering several historic and currently producing oil and gas fields and many hundreds of vertical wellbores

  • ●  Work has commenced on the Orion Project, with the Black Mesa Energy team analysing comprehensive data sets covering the focus area to refine and identify acquisition opportunities – discussions have commenced on several targets already

  • ●  The current macro environment has created a unique opportunity to acquire producing properties in an area that we know extremely well at a time in the cycle when prices are below the incentive price for aggressive development



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

“We are delighted to be partnering with Stonehorse on this new venture. This time in the commodity price cycle is presenting some fantastic opportunities and we are extremely well positioned to take advantage of this and to continue to grow our asset base within the SWISH AOI.


“The Black Mesa team has been working hard over the last several weeks sifting through an enormous amount of data looking for the best opportunities and I’m excited to report that this work is already delivering up targets to pursue.

“This is going to be a very exciting initiative for us and we look forward to keeping our shareholders and the marker updated as we progress it.”


1 Black Mesa will receive an 18.75% Working Interest Back in After Payout on assets acquired pursuant to the Orion Project Joint

Venture in accordance with the terms of the Acquisitions Program Agreement between BRK Oklahoma Holdings, LLC and Black Mesa Energy, LLC.


RESPONDING TO THE MACRO ENVIRONMENT

Recent global events that have impacted demand for oil and gas, together with the supply side tensions between the OPEC+ nations have resulted in sharply lower commodity prices. This has created a significant opportunity for companies that are able to respond to this macro environment.


The current price environment has seen a dramatic drop in the level of drilling and completion activity across the US basins (including the Anadarko Basin). This reduction in activity is likely to have a lasting impact on future US oil and gas production and help to quickly restore the apparent supply demand imbalance, putting upward pressure on prices.

In particular we see natural gas prices being a very strong beneficiary of this recovery with some commentators calling for much higher prices later this year and into 2021 and beyond.


This environment has created a unique opportunity to acquire producing properties in an area that we know extremely well at a time in the cycle when prices are below the incentive price for aggressive development.


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Figure 1. US Liquids Production Growth Source EIA, Raymond James Research


JOINT VENTURE STRUCTURE AND KEY METRICS

The Orion Project is a 50/50 joint venture between Brookside Energy Limited and Stonehorse Energy Limited, with Brookside’s subsidiary Black Mesa Energy, LLC responsible for identifying, acquiring and operating the properties on behalf of the joint venture.

The joint venture participants have committed to an initial combined investment in the Orion Project of US$500,000 with the opportunity to expand this commitment as the joint venture grows.


The joint venture will be acquiring producing properties and the associated “Held by Production” acreage, with an emphasis on natural gas weighted production from mature vertical wells with very low terminal decline and substantial remaining economic life.

The producing properties will be cashflow positive at the current Forward Strip pricing, with upside that can be unlocked from remedial workover activities or from unexploited or underexploited behind pipe or deeper productive zones.


JOINT VENTURE OBJECTIVES

The joint venture will acquire a portfolio of operated, long-life producing wellbores with upside that can be unlocked through low-cost, low-risk workovers (see Figure 2. below). The Companies aim to build out this portfolio at a low point in the commodity price cycle and then add value through operational execution.


The ultimate objective is to grow this asset base to complement our existing asset base and leasehold acreage within the SWISH AOI and to increase both operating cashflows and reserves.


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Figure 2. Anadarko Basin Vertical Well Workover Scenario


Read the full ASX Release Here

ORION PROJECT INVESTOR DECK JUNE

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BROOKSIDE ENERGY'S ORION PROJECT INVESTOR DECK

ASX Release 10th June 2020



View the full Presentation Here

OKLAHOMA ANADARKO BASIN

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