Hi @fincmifr Thank you for your input, it is much appreciated....

Hi @fincmifr

Thank you for your input, it is much appreciated.

Just want to clarify a few points.


BRK is far from a marginal producer.... and production is not it's business model. Production is a by-product of the asset revaluation process, and at high oil/ gas prices, a valuable by -product of drilling to get the SWISH DSU's Held By Production, which moved the mineral rights, and therefore the reserves from the leaseholders to BRK, which facilitates revaluation of the acreage leased by BRK.

Currently BRK breakeven costs are US$20m for the Sycamore formation based on the Jewell well, and US$ 30 for the Woodford ( modelled) as per below.


BRK presentation 28/7/2022

In all honesty, as we only have a 2 well sample ( the above based only on the Jewell) with Jewell exceeding expectations, and Rangers slightly below expectations, I would expect the Sycamore BE to approach US$30 over the longer term.

Current production and transport costs for the 3 SWISH wells is ~US$4-5 per BOE as much of the production is still in flush flows. The low decline STACK production averages ~US$8 per BOE .

During last week's Sydney roadshow I asked DP what current netbacks were per BOE which he said were ~US$60-65. That is the margin of post royalty BOE produced. These netback are positively affected by the high % oil flow in the hydrocarbon mix so off course, the POO has an impact, but is not the only pricing factor of the BOE netback.

HH gas prices are not correlated to the POO in any significant degree .

HH gas prices are correlated to USA gas demand, which is mainly a function of temperature (extreme cold in winter, high heat in summer) effect on power generation and heating, Mexican pipeline and LNG exports countered by Canadian gas imports.

NGL prices are more correlated to gas prices .

The POO will be very important for the Bradbury AOI, which if successful will be a predominantly an oil producing project, where currently production is immaterial to BRK at 2-5 BOPD from the Thelma well.

I only mention this because looking at BRK as a producer of oil and gas , rather than an oil and gas asset developer/ monetiser, where production is a very beneficial by-product and only one monetisation pathway will result in erroneous analysis and misunderstanding.

Cheers

Dan