Ann: Quarterly Activities Report and Appendix 5B - Dec 2017, page-9

The reason why there are no oil sales is explained by the structure of the Merchant drilling facility.

The facility pays BRK 's drilling costs for it's interest in each well. Any income from a producing well goes straight to Merchant to pay back the monies owed to drill and get the well into production.

Once the well is "paid back", Merchant will receive 25% of BRK's interest in the well and BRK will start to book revenue for well.

Don't expect to see revenue booked to BRK's interests for quite some time..... what I do find puzzling is why the income from the royalty interest in the IKE #1-20 well which as been producing for at least 6 months is not showing. There is no Merchant funding associated with any of the royalty wells so this interest should have been contributing between 2-6 BOEPD , or $50-$150 per day straight into BRK's income statement.

This company is an enigma and normally I run for the hills, but despite the need for a few more CRs the value proposition here is compelling which is why I am still sticking around.

Cheers

Dan