Ok, lets try this again.
Which third pillar are you talking about?
The three pillars of their business plan are in no particular order.
1) land and leasing
2) operated drilling
3) PDP acquisitions
View attachment 5618018They look to conduct all three simultaneously , but depending on market conditions, they focus on different parts of the pillars. For example, they will not buy PDP properties at times of high commodity prices . They have completed the operated drilling phase for the initial DSU well, and if they keep operatorship in any of the JV’s they negotiate, they will restart that soon enough. They are securing leases continuously as todays announcement attests.
Monetisation is not a pillar so I think you are a little confused .
But…
BRK have been talking about monetisation, not for 2 years, but over 3 years since Feb 2020, just as they secured the Rangers and Flames DSU’s, to make it 3 operated DSU’s.
View attachment 5617979At that time BRK were just into phase 2, the Upgrade phase… they didn’t have the funds or drilling partners , and were in the planning stages to drill the first of the 3 DSU’s they had just won operatorship of….. yet they had produced this flowchart of what they were going to do.
They have now successfully worked through phase 2, and 3, albeit with massive dilution which wasn’t part of the plan, as the initial wells were to be funded by third parties. They are now in the 4th phase and there are no dates to this flow chart( or itineraries) , but milestones which so far they have pretty well all hit along the way .
We can see that one of the monetisation options / milestones is “ harvesting cashflow from de-risked, proved, undeveloped locations”, which now looks like the way forward and almost certainly will be conducted in drilling JV’s which will allow for multiple, back to back drilling and completion. I suspect you will find the “moving quickly “ in the announcement refers to what is happening behind the scenes as the CLR model has highlighted the development pathway, and the progress on Flame/Maroons and Bruins DSU’s has “ unblocked “ the projects somewhat.
Just because the monetisation phase seems to have taken longer than shareholders, and possibly BRK wanted, doesn’t mean nothing in terms of monetisation is happening behind the scenes.
So whilst they haven’t completed phase 4, that is where we are in the flowchart now, and they will announce when there is something to announce. They are not just going to stop between phase 3 and 4 , take their bats and go home.
As a final comment, apart from not being able to secure 3rd parties to fund the initial DSU wells and avoid the massive equity dilution which followed, looking at the above flow chart from 2020, the strategy has pretty well gone according to plan, not necessarily according to time and certainly not according to the hoped for market recognition/reward. How well stage 4 is executed remains to be seen, and that should come to light soon enough.
Ciao
Dan
(20min delay)