Ann: Sycamore Well Flows 2,067 Boe/day in SWISH AOI, page-18

Great result for the Sycamore, best one seen from the area to date.

The Jewell pre-drill estimates are 1000-1200 BEOPD with 58-70% oil ranges.





The well result will be a function of the geology and completion technique. Hopefully the geology in our unit is comparable to the Ringer Ranch and the BM completion design gives us a result better than expected.


BRK are in the game for PUD revaluation and sale, not for production (which is basically the icing on the PUD cake.) as can be seen from the step in arrangement they have with SHE whereby they forego production to avoid drilling costs. The real significance of the great drilling results in and around the SWISH AOI  is not potential production in regards to cash flow for BRK, but the fact that the more prolific the area, the higher the PUD value which is what BRK are interested in.

Having said that,depending on the Jewell result,  an interesting aside to consider is that Black Mesa will have a 25% back in on the BRK pooling equity (~90%) after payout, no matter what the BRK equity in the well will finally end up being.  The better the well result, the faster the payout which is typically up to 2 years.  So, in the highly unlikely event that the Jewell unit is not sold and is retained after payout , apart from having a 22.5 % WI in the drilling unit, BM will also have ~22.5% WI interest in the well and the production that comes from it. Not a bad piece of icing, despite the fact that the typical decline cure will mean after 2 years, the well production 30-40% of it's initial rate.

Cheers

Dan