For me, that's the money slide! Today BRK have tied some lose...

For me, that's the money slide!

Today BRK have tied some lose ends in regards to quite a number of significant uncertainties that many holders have had for a while.

I would say BRK have slayed the " funding Dragon " in terms of the Flames well, which right now is fully funded and brought forward by 6 months in response to the highly supportive commodity prices. BRK could have sat on their hands, waited till July for the cashflow from Jewell, Rangers and option expiry to fund the well,.... this probably was going to happen under " normal ' circumstances, but this option to advance the Flames is a smart, proactive response by BRK to a changing economic climate which enhances shareholder value in terms of cash flow , and a increase in NPV of the Flames DSU.



BRK have slayed the " uncertainty regarding the forward plan Dragon" with the above timeline chart. Not only do we now have the drilling program for the next 18 months laid out, BRK have pretty well alluded " officially" they intend to fully develop the Sycamore formation in house over that period. Whilst they haven't expressly said so in the presentation, IMO you can take from the plan that they do not intend to develop the Woodford formation.... why are they then drilling the Flames as a Woodford well? .. That would be to prove the productivity of the zone in their DSU to enhance the salability of the Woodford PUD reserves, not only at Flames , but Jewell and rangers as well.

IMO, BRK have also slayed the "questions regarding the options Dragon". The underwriting of the options on the back of the note issue, which will guarantee the cash to repay the notes is a genius move, sure it costs BRK underwriting fees etc, but the optionality this Note deal has provided BRK is significant. The downside is there will be extra dilution because without the underwrite, if 50% of the outstanding 1.575 billion ( ~790 million ) options aren't exercise for whatever reason, this underwrite will pretty much guarantee there will be a 100% option conversion.

In all honesty, in a perfect world, I would prefer for the underwrite to " fail" and CPS backed out ,very few options exercised by holders so the number of shares that will be issued at 1.1 cents would be minimized whilst the note be paid back by cashflow generated by Jewell, Rangers and any options exercised not subject to the underwrite. I will admit to being a TOTAL hypocrite on those lines as I will be exercising my full allotment of options ... ( ie, I want to exercise my options but I don't want you to exercise yours to minimize my dilution ) .... as I said, in a prefect world .

This is in no way financial advise, but those saying CPS get a huge risk free benefit from the option underwrite and are upset about that, can actively stop the " perceived" money grab by exercising their options and limiting those that will be subject to the underwrite.

All in all, a turning point for BRK today on so many levels ( regardless of the share price response);

and another great day to be a " Brookie"


Cheers

Dan


Ps.. they are drilling 5 more " big " wells over the next 15 months after Rangers.. considering these guys don't drill for production, if these wells just on average , reproduce the Jewell, the ASX listed producers in Oct 2023 in descending order of production will be

1) WPL
2) STO
3) BPT
4) KAR
5) COE..... (5) (SXY.. taken over)
6)BRK

If you exclude Origin and Mineral Resources as E&P companies and no other companies make some large production acquisitions.

And, this production will ALL be generated ,operated, drilled, developed in house!