The lack of commentary/ analysis on it just highlights how few folks actually get how undervalued BRK is.
Straight to the top of the class @BeserkWarrioras you obviously understand the value proposition the BRK presents.
Lets analyse the crux of this post.
A 10% buy back at current prices will cost ~$5.5- 6 million dollars. The question is what does that buy ?
BRK announced in late 2020 a prospective resource in the Jewell, Rangers and Flames DSU's of ~11.6 MMBOE. This was a net/ net number being net to BRK's WI , after subtracting royalties,accounting for Black Mesa's 25% back in after payout and being a 2 stream ( oil and raw gas) reserve which means there was no consideration of NGL reserves that make up 40% of the reserve. Also excluded was the 320 acre Rangers addition which increased those reserves by 13% ... and now the latest Bruins DSU which added another 34% to the Woodford reserves or ~17% in total.
Just taking the 11.6 MMBOE , $AUD 6 million buys 10% or ~1.16MMBOE reserves which is ~$AUD 5.17 per BOE or ~$US 3.4 per BOE.
If you take into consideration the NGL reserves, the extra SWISH acreage gained since 2020 you are looking at a 3 stream reserve ( oil, NGL and processed gas) of ~20--25 MMBOE net to BRK. So the $6 million buys 2-2.5 MMBOE of PDP, PUD and prospective resources ( will become PDP and PUD once Bruins is drilled) or ~$AUD 2.4 - $AUD 3 per BOE or ~US$ 1.6 - US$ 2 per BOE.
Just for comparison, in 2021 BRK paid ~US$ 8.30 per BOE or ~$AUD 12.5 for the mainly gas (90% of the reserve and production stream) legacy low decline wells it vended into the STACK JV. It was very happy to pay that price.
The SWISH reserves are liquid rich with oil and NGL's making up 60-70% which makes those reserves higher value than dry gas. For example purposes only ,if you attribute the same $AUD 12.5 per BOE to the SWISH, the ASX is valuing BRK reserves at 20-25% of what BRK paid for an inferior production stream in a asset they knew very well. What would tier 1 reserves in the Anadarko basin be worth on the market today is the $64 million question. Anyone care to do some research to find what assets like this sell ? It certainly is closer to the US$8 per BOE or more than to US$ 1.6-2 current market value....and US$ 8 per BOE may not be enough to move the dial for BRK to sell.
In addition, the $6 million also buys $2 million in cash ( 10% of say $26 million -$6 million at March 30), buys 10% of the SWISH non operated reserves and non SWISH reserves of ~3 MMBOE and 10% of the Bradbury AOI including the Juanita well..
It is bleeding obvious BRK are incredibly undervalued, so the question is as you put it with a little twist, if the market won't buy it, can BRK afford NOT to buy back at these prices ( while the opportunity lasts)
Thanks for your excellent and incisive post.
Cheers
Dan
BRK Price at posting:
1.2¢ Sentiment: Buy Disclosure: Held
(20min delay)