Hi All,
Answers to the majority of questions below. Was great to meet the BRK team finally as well as Mathew Walker and many others. AGM was great and very informative. Excited for what has been slated for the coming months! Q&A below:
Why aren’t the directors puttingmore skin in the game, don’t have many shares? Waiting for the opportune time?
A.If a director buys, essentially they cannot sellwithout upsetting the market. Performance based allocations will be put inplace down the track where directors are remunerated with options or sharesbased on performance. Structure yet to be finalized.
To date, BRK has not communicated officially theend goal to shareholders (effectively). Can BRK release the end goal intentionvia an Ann?
A.The ultimate end goal would be to sell the company (ideally)but it’s not like you put up a for sale sign and try to sell the company whenyou’re ready. You just keep on doing what you’re doing and eventually someonewill come knocking who wants to buy you out. In the meantime, BRK will keep on acquiringacreage and increasing asset value. In the event of a sale, the offer wouldneed to be put to shareholders.
How is BRK going to spread themessage, outside of those already watching?
A.Advisory board working on getting more eyes on BRK.Volatility in the oil market late last year (likely) affected investorsentiment but confidence potentially returning. Noosa mining conference will beattended this year. Proactive Investor luncheons will also be attended.
Tying in with the above, will BRKidentify the point of difference to the market? Ie: High chance of success andPUD multiple factor. (Because if the market is a probability betting machine, and our odds areweighted to success by the performance of BM) Doesn’t that make market awarenessof our edge, the absent element to speculative buyers? vs frustrated sellers.
A.No silver bullet for this one. Difficult to harnessattention at conferences as limited time to discuss the model. Potentiallybetter off spending time with high net worth individuals in a one on oneenvironment to really drill down on the model and how it works.
Repayment of STACK-A facility drilling facility andany reason we don’t report it in the Q anymore?
A.No change to the Stack A drilling facility. Cycledmoney into other projects along the way. No plans to pay it out anytime soon asthe capital is constantly working in other areas.
What is our holding in BM worth?
A.Not possible to say as it comes down to whatsomeone would be willing to pay.
Will there be any dividends or valuations shortly?
A.Reserve valuation – other than that, notingplanned.
Please confirm the Bullard well step-inarrangements? How much will we receive if SHE step-in? Will we keep revenuereceived? More detail needed on this.
A.My understanding is BRK won’t be out of pocket inany way and any revenue received to the date of the contact being completedwill belong to BRK. Any outstanding payments will likely be passed on to SHEie: leasing costs, completion costs etc. Agreement with SHE to be negotiated.
What is the outlook for 3, 6, 12, 24 months?Milestones likely to be achieved etc.
A.Centaur wells, Jewell, Reserves updates, Henry Fedpotentially some WI in additional infill wells.
What are the funding arrangements for the Jewellwell? Wellbore contract, sale of acreage or Drillco?
A.Ongoing, incomplete, to be decided.
Tying in with the above, update and status ofJewell? Where are we at?
A.In progress. Updates to follow when available.
Status of centaur unit infill wells?
A.In progress – update once available.
Status of Henry Federal Well?
A.Spudding.
When is the next reserves report likely to be due?
A.Update on reserves to come “soon”, potentially thenext few months. Won’t be Bullard specific but annual reserves report will comewhen ready.
It has been about 6 months sincethe creation of the Advisory Board. What has the board achieved? Further,additional members were slated for "coming months".
A.Work in progress. Looking for additional members tojoin the board.
What is the payout status of our STACK-A joint ventureparent wells, and when can we expect to start seeing cash flows from thesewells appear in the quarterlies? (only Landreth BIA well has achieved payout sofar)
A.Updates to come when available.
Follow-up to above query; do we have timeframes ifor when the operators of the above-mentioned wells plan on developing their full-fielddevelopments and infill well projects?
A.Not at the moment.
Follow-up to above query; what is the intention forour share of funding moving forward for our WI% share of development costs iffull field development progresses in the STACK? (i.e. acreage sale, renewal of STACK-Afacility, working capital?) I note we are using working capital for our shareof the centuar unit because our WI% is quite small relative to other drillingunits.
A.Various – to be negotiated as opportunities arise.
Given our business model relies on ultimatelyacreage sale, have any operators, private equity firms or any other investorsexpressed interest in any of our acreage?
A.Yes, all the time. No
Confirm status of force pooling operations inSWISH?
A.Winning – Process is quite complicated but as per
Last quarter BRKRECEIVED $500k - No loan payment has been made in the Quarterly. As perprevious our understandings, the loan facilities are paid out first and onlyafter they are paid out can we receive income. How was this reporting period different?
A.As we stumped up ~$1mup front and our 20% share of the well (share in the well $ wise is 2m ie: Westumped up ~$1m and $1m from the Drillco) the drilling and completion costs (~$1m)have effectively been paid out already. The $1m we outlaid originally will comeback into the bank account via revenue (as per the quarterly, ~$500k so far).Revenue will continue to flow into the bank account until the originallyoutlaid ~$1m has been recouped.
What valuations inMC, do other companies have with 3.45m BOE reserves? – Any competitors come to mind with a similarscale to BRK?
A.Hard to answer – no direct comparisons but I wouldassume we could take any company with larger reserves and divide it down. Veryloose valuation calculations though.
If BRK were to acquire additional land in one ofthe counties surrounding the current BRK land holdings, would they be movingsouth or north? (as in north outside of the state of Oklahoma and branchinginto a new area?) – a possibility?
A.Full time geologists looking all the time. Noparticular location in mind but always looking for opportunities.
As there is a lot of funding of projects, deals etckept off books, unavailable to see full disclosure so to speak, is the realtyprimarily acquired through cash, options, shares, or some other method?
A.$$ or trading of acreages only.
In the event the company is bought out soon andhypothetically below the option strike price, what would happen to the optionholders?
A.Shareholders would have to vote on the sale. Not alot of chance of a sale at 2.9c from what I understood.
A few more questions were asked - will update more as they come to mind - again, apologies for the formatting issues. Cutting and pasting seems to confuse the HC platform.
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