Just to clarify, I forgot that the STACK JV was a well bore only deal, so Merchant's 25% NRI only applied to the wells they funded and never applied to the DSU'S associated with the wells.... the net effect is the same in that due to this deal, BRK will receive 100% of the cashflow from the acquisition date and will be able to participate in any future development drilling on these DSU's at their WI level.
So what does this mean for BRK.
1) Increase net production of ~110 BOEPD and increase in PDP of ~240,000 BOE
2) Be able to participate in PUD development in DSU's targeting ~ 800,000-1,000,000 BOE PUD through another 30-40 wells within those 11 DSU's.
Note . each well is associated with a DSU which needs 3-4 further wells to develop and for which the WI that BRK can participate is analogous to the current well WI .
In addition and generally not understood/ appreciated by the market is also:
3) There are another 10 producing wells on 10 DSU's outside of the STACK JV wells that potentially will need 3-4 wells to fully develop with a PUD net to BRK in the order of 1.5 million+ BOE
The 4 centaur wells are in the first DSU that BRK participated in field development.
The DSU participation for the Bullard and Henry Federal are ~20% and 8% respectively.
4) There are another 11-12 DSU's that BRK have non operated WI's in that have initial wells in the permitting stages and are as yet undrilled that will also multiple wells to develop.
Note: Jewell, Rangers and Flames in the to be drilled list. The Maple Leafs was to be an operated DSU but appears acres traded.. to be confirmed.
Some of the the above DSU's that BRK have minority interests in have been in the top 5% Anadarko basin best wells.
Above is taken from 2019 independent research document for those not familiar
https://aprivateinvestorsviewhome.f...gy-a-private-investors-view-november-2019.pdf
Admittedly, many of the WI levels are immaterial on an individual basis, but in combination they have the potential to develop into a material bank of long term, highly cash flow positive production for the company.
And that is on top of the 3 operated DSU's , Jewell, Rangers and Flames that is the BRK main game and excludes the Thelma / Bradbury vertical well drilling opportunity.
Now that the price of oil and gas has returned to pre-covid levels, many of the operators are dusting off their drilling program files and will resume drilling. If the drilling programs do not resume, the DSU's will expire as will the leases so there will be the opportunity for BRK, if they desire to add and build acreage positions within their SWISH AOI outside their operated positions.
This stock is not a one well, one shot wonder but has a material asset / reserve base well above it's current market cap.
cheers
Dan
(20min delay)