HI all, page-12

Not going to secure rigs until all court processes are completed for well locations and spacing exemptions are approved.

They are drilling long length horizontal wells through sections with existing 20-40 acre DSU's with existing vertical production . There are spacing requirements which limit how close wells can come to existing DSU's. Sometimes the most ideal well path means the horizontal well comes too close to the existing vertical well. The vertical well may be producing 5 barrels a month. The DSU owner may not want to deal with the horizontal well operator because they want a better terms. The HZ well operator applies for a spacing exemption to drill closer than the legal requirement and the vertical well DSU owner lodges a protest to that application which then gets a hearing date which is set to hear that, and all other protests.

Some protests may just be vexatious, some may be legit. If an order is given by the OCC for the company in favour of the spacing application the vertical well DSU owner has the right to lodge for a review, for which another court case date is set.. this is the process.

The HZ well operator negotiates with lease holders of open acreage or vertical DSU's whilst the build a lease position of ~30% of the available acreage to be able to apply for a horizontal well DSU operatorship. They negotiate with the holders of the leases they pick up but not with all the lease holders. Once they think they have enough acreage to apply for operatorship the place a public notice into the paper, listing all the known leaseholders, and individually send them notices in the mail of their intention to apply for the well location , well spacing exemptions, and pooling applications. There are always protests. It is impossible for the company to know before hand from those open leases who will protest etc and therefore how long it will take.

So they can plan to drill a well every quarter, but it doesn't always pan out the way they plan. From what I can see in the OCC they originally put the application for the Jewell appraisal in April and the court process has probably taken longer than expected, but should be close now.


You ask if the 3 pillars are legit?

1) The operated drilling program...That is the pillar they are spending most effort on right now . Jeez, you query that when they have successfully drilled the 3 wells they needed to drill to get the acreage HBP... when you look back at their announcements, please show me where they stated before hand when they intended to start drill the individual wells. They described the order , Jewell, rangers, Flames but they never gave a timeline.... possibly they didn't have a specific timeline because they didn't have the funding. Now they are funded it looks like they created a rod for their backs by giving more detail in terms of the new SWISH development program , which they will continue with at the pace the courts will allow for their permits, and available rig slots after they get their approvals.

2) The land and leasing pillar... that is ongoing as we speak leasing within their existing DSU's and some leasing outside. Any sale of leases they did in the past was either for cash once they increased in value which the used for ongoing operations when they were undercapitalised. It was effectively the land/ leasing pillar that kept them alive for the 3 years 2018-2021. This is where where primary leases are purchased and either have been sold for profit undrilled, traded for leases they want, or as will occur in the not too distant future, sold as revalued leases on which operated drilling has occurred and significant value built through reserve generation..... when, who know, possibly the guys that will purchase them don't know they will purchase them yet!

3) PDP acquisitions... essentially the Orion project, and to some extent , the " bringing back to the house" of the wells in the STACK JV. This pillar only really comes to the for when there is a downturn and distressed sellers are flogging off production assets, or BRK manages an opportunistic acquisition out of cycle. Will come into play in the future in the next down turn, but the only difference should be BRk will be capitalised enough to make any acquisition material.

In regards to a specific plan, what is any companies' specific plan for anything.. how is CTP, CUE, NZO specific plan for it's Palm Valley drill program going?... what is HZN's specific plan for the future after it's China operations for the Beibu Gulf are handed back in a couple of years...what are TEG plans for the Cliff head field?...what are the specific plans STO have for the Dorado field? ... How have Cooper Energy's plans in the Gippsland and Otway basins changed in the last few years etc, etc?

The @TheProfessional posts regarding a certain asset manager who at one stage was possibly the 2nd largest holder in BRK and his problems with margin loans is a pointer as a significant driving for in the share price trajectory.

Having multiple monetisation scenarios based on opportunities, the commodity price fluctuations and under/ overperformance of assets is actually the best plan to have IMO. That is much better rather than to be stuck in the lane going only in one direction, when circumstances warrant a different reaction but the company is committed.

A classic example of that is a geared oil and gas producer that is making good money when oil prices are high. It increases production, revenue , profits and borrowings when oil/ gas prices are high... when the cycle turns, and it's margins are squeezed and the bank adjusts the loan limit to reflect the drop in value of it's reserves, the company has to sell some of it's production assets to pay down it's loans to get below the bank imposed threshold, and the downward spiral operationally continues. The company sells it's assets at precisely the wrong time, a time it should be buying. It doesn't have a full cycle business plan. It's only plan is to produce oil and gas.

That's not BRK.

Kinda going around in circles now so will leave it with that.

Cheers

Dan