Hi @ChiggaHiggins.
Great to hear you are a LTH and believe in the 'plan' as such. I actually do understand where you are coming from and commend you for thinking critically in terms of your investment in BRK . If you don't question you don't gain comprehension and knowledge and the more knowledge you gain the less risk you have.
So this is how I see things in the context of a growing company vs a mature one.
The BRK plan is essentially the old " buy low and sell high". What , how much , where , from whom they buy low depends on many variables, as does what, how much, where , to whom they sell to the extent there cannot be a fixed detailed plan. The monetisation plan at $60 oil will be different to the plan at $100 oil as the opportunities at those price levels will differ. That is why BRK say they will do what is in the best interests of shareholders at a particular time. For example, I am confident that there would not have been any drilling planned by BRK in the SWISH past the initial HBP wells in each DSU if oil was at US$50 today.
BRK are all about speed of return on capital invested ( payback/ payout time) and very high oil / gas prices obviously provide a faster return from production than is typical, so right now drilling and producing at least some of the reserves is part of the 'plan'. Remember, the original plan was for BRK NOT to have any direct equity in any of the HBP wells in each DSU ... they originally were planning to essentially swap all the production and profit from each initial well ( Jewell, Rangers and Flames) to have the well funded by third parties on a wellbore only basis, thus avoiding the need to raise drilling capital and dilute shareholders. We all know how that plan panned out.
Currently, regardless of the high commodity prices and project ROI, the company is in the asset building phase, so it is highly unlikely that nay cashflow will be returned to shareholders in any form, nor should it be, as it needs to be deployed in funding drilling and more acreage acquisition (without paying too much for the land). The last thing shareholders want to see, will tolerate is another capital raise. So it is logical to expect that during the company building phase, the only " return" a shareholder will get will be an improvement in the share price.
The only time E&P companies pay dividend , return capital in the form of buybacks or capital returns is when they have sustainable free cashflow over and above their operating and growth requirements... or if they receive lump sum cash / share payments over and above their needs where they can distribute / return the excess to their shareholders. Are BRK close to being in that position?..not from production cashflow but possibly yes from potential PUD asset sales. Having said that, surely right now one can't expect BRK to preannounce anything regarding asset sales in terms of what they may sell, how much, or what they could potentially return to shareholders?
When will BRK start the first development well? To head of further confusion, I do think some information from the company is warranted. Especially due to the details given in the March 2022 presentation, which whilst it didn't give specific dates for future events, the format did indicate a timeline of sorts showing the first Sycamore well commencing drilling before the Flames well started production.
Cheers
Dan
(20min delay)