Wolf Pack ... so far , so very good!, page-25

Definitely not worried about the $18 million in outflows, most of which was D&C for WP and Juanita.

The company is still in business building mode and needs to spend to grow. The alternative was not to spend that money so:

1) No WP well and no WP production/ cashflow ( looks like the well will payout in less than 5 months)

2) No Juanita therefore no chance of a new AOI with multiple low cost, high value vertical wells , reserves and production.

As a result of that spend, ( which should be paid back in less than 6 months depending on what comes out of Juanita), BRK will have double the production and the cash pile rebuilt rapidly..... for Flames, to fund this well BRK accelerated the option conversion with the CPS deal . For a more expensive Wolf Pack well , BRK internally funded it, plus Juanita and still had ~$17 million in the bank at end March... and probably another $4-5 million now in the bank at end April.

In terms of spending $6 million to make $9 million, that is not quite it. A large chunk of that $6 million would have been paying WI and royalties from the previous quarter (where BRK revenue was $16 million) as they are also paid in arrears. BRK collect 100% of the field revenue ( even though they have 50% Jewell- 70/80% other wells) and then pay out the WI partners and royalties in arrears after they collect the cash. For the next quarter, BRK may have revenue of ~$22 million, but their WI and Royalty payments will be mostly based on the March quarter ($9 million) so it is likely that the operating cash flow will be ~16-18 million ... it's a timing issue mainly.

The March Q operating revenue was negatively affected by timing whereas the June Q should be positively effected.

Hope that makes sense

Cheers

Dan