Ann: Excellent Initial Production Rates for Anadarko Acreage, page-15

Today the market has begun to waken to this success story. Good volume turnover today with more to come

Travelling a Familiar Path to Success
The team at ASX listed Brookside Energy Ltd (ASX: BRK) have been quietly establishing a platform for future growth at a time when the broader market is focussed elsewhere.
In late 2015, when the price of oil had dipped to the low US$30’s per barrel, Brookside teamed up with its partner and manager of US operations Black Mesa Production, LLC (a privately held company founded by several long-time Tulsa oilmen) with an eye on accumulating quality oil and gas acreage at the bottom of the cycle. A strategy of buy-low and sell-high that the Black Mesa guys had successfully repeated several times over the last four decades.

Working together, the group are pursuing a business model with a long history of success in the US. The deep sophisticated market for oil and gas properties in the US and a very well understood per acre valuation model provides the opportunity to generate transformational returns for savvy participants like Brookside that identify opportunities early, accumulate acreage that increases in value as the play or region matures.

Brookside has already pulled together around 1,400 acres in the core of the Anadarko Basin Plays (STACK and SCOOP), a region that has been described by various active operators to host “truly world-class resource plays” that generate superior rates of return in the current oil price environment. The STACK and SCOOP plays are ranked in the top five most profitable US on-shore plays, sitting comfortably alongside the Permian Basin plays where undeveloped acreage regularly changes hands at north of US$50,000 per acre.

Brookside describes four keys to success as; timing in the commodity price cycle (buy-low); have the skills to identify the right opportunity; having the capacity to execute (financial and technical capabilities); and finally, be prepared and ready to sell-high.

Brookside and Black Mesa clearly have these keys to success covered and the STACK and SCOOP plays are co-operating as they continue to produce wells with record setting initial production rates. The most recent a stunning Continental Resources (NYSE: CLR) well that achieved a 24-hour rate of 7,442 barrels of oil equivalent.

As you would expect with results like this, acreage prices have already started to move with a recent sale of undeveloped acreage in the core of the STACK play (Blaine County, a focus area for Brookside) printing at US$19,000 per acre.

Seasoned industry participants that have seen this price per acre re-rating unfold several times before (Aussies will recall ASX listed Aurora Oil & Gas selling 22,000 acres in the Eagle Ford play for US$2.3 billion in early 2014) say that its only a matter of time before the Anadarko Basin Plays will change hands at prices similar to those already being seen in the Permian plays.

The folks at Brookside tell us they are not done picking up acres in the Anadarko Basin. The window hasn’t closed yet and the guys have their sights on adding materially to their position between now and the end of 2017. Picking up acreage at wholesale rates in the core of these world-class plays and letting the results and the market take care of the rest.

It won’t be long before the Aussie market wakes-up to this sleeper that is leveraged to continued regular news from the tier-one operators that are actively unlocking the value embedded in the oil and gas saturated stacked geological formations of the Anadarko Basin in Oklahoma.



Keep well Cheers Paul