Absolutely delighted as report confirms what we suspected.
We have a cracker of a well and BRK are now firmly on the road achieve the business plan.
First glance impression..... Jewell WI down to 41.6% from 42.5 %. Looks like a few more stragglers decided to participate in the well because she is a cracker. Probably a few more agreed than expected to to JIB ( Joint Interest Billing) the costs on the well so effectively they pay their well costs from production as the bills come in. BRK do it all the time.
At first the quarterly oil production seemed a bit low at 23,836 barrels net to BRK, but then realised the is after the 20% royalty is taken out which then lifts the number attributable to BRK's WI to 29975 barrels.. I was expecting 32000 based on a 42.5 % interest. From the cum prod graph it looks like the well was down for 3-4 days in early October and again for about the same in late Dec which would account for the lower barrels produced so am absolutely delighted thus far.
IP90 of 1570 BOPED ( 73% oil and NGL) vs IP30 of 1604 BOEPD (74% liquids) is a great positive surprise. Was expecting more decline and a greater gas component so really , really good news for the March quarter revenue which shouldn't fall, and indeed may be stronger if commodity prices stay elevated at current levels ( gas prices over night over a buck up!)
The headline 540 BOEPD BRK production is ex 20% royalty so actual WI level production is 675 BOEPD of which ~140 BOEPD is non Jewell production. When an operator reports well production they don't take royalties into account, just report the flows which is why I keep on reverting to WI level production. The $64,000 production costs are not fully reflective of the Jewell costs so that number should significantly considering Jewell costs are ~US$5 per BOE. Will need to check out the SHE quarterly to get a handle on their drilling, completion spend which should be pretty well all on the Jewell to see how much of the BRK $1.957 million could be Rangers spend.
The cum prod table on page 5 shows the 3 stream production ( including NGL's) from the start to end Dec 2021 ( royalties not taken out here) of 88070 barrels oil, 38521 barrels NGL's and 275,051 MMCF shrunk gas ...... the graph shows the raw gas to be ~390MMCFG
I mention this because the Jewell base rate 12 month cum production guidance 2 stream ( oil and raw , non NGL extracted gas) was 324,000 BOE. So far Jewell to Dec 31, 2021 has produced 88,000 Barrels oil and 390MMCFG (65,000 BOE gas) for a total of 153,000 BOE, or just under half the volume in 4 months!. The small decline so far indicated the projected full year guidance will be blown out of the park if there are no significant well downtimes and the trend continues. The revenue producing 3 stream cum volume is 88,070 BO, 38,521 barrels NGL, 250,051 MMCFG ( 45,841 BOE gas) or 172, 432 BOE!
I like the comment regarding the Orion project:
"We also continued to advance the technical work on the Bradbury opportunity during the quarter and are now close to a positive recommendation to move forward and drill a low-cost vertical well to offset the Company’s Thelma well."
This will be a US$1.4 million spend ( 50/50 with SHE) on a vertical well which should open up an 40 acre DSU and the well should IP 150-300 BOPD on a conventional decline. High value , low cost production with further appraisal potential if the well comes in targeting unproduced oil zones.
So great report, brilliant IP90 rates, cash flow is booming and great to see a build despite ~$2 million spent on drilling Rangers and some completion costs for Jewell.
Whatever the market response to this report , bear in mind if Rangers comes in just like Jewell, and not at the explosive Sundance kid then with double the WI, the first quarter that includes both wells revenue numbers will be~ 2.5 times this report. If the Rangers emulates the Sundance Kid then we could be looking at 4 time the numbers .
Another great day to be a Brookie.
Cheers
Dan
BRK Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
(20min delay)