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Payback is only a technical figure though and the wells will...

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McGurk83

160 Posts.

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05/01/24

19:29

Post #: 71749385
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Originally posted by NotRelevent: ↑

so with an approximately 12 month payback period on this modest batch of drilling we very likely won't see a significant benefit until well into 2025?
This also doesn't take into account that they will need to fund the next batch of drilling, so they will likely be using the funds from this first batch drilling program to fund the next correct.

This will in turn likely limit free cashflow available for other purposes including returning cash to shareholders. This will likely mean that any future buyback will likely be conducted in the same ultra conservative manner as the previous one that has seen sp at all time low.

So by the time they drill out and flow this first batch of wells it will be late 2024, then late 2025 by the time it achieves payback. It is likely probable they will commence work on the second batch drill program at some point in 2025 and will be completed in 2026 and achieve payback in 2027.

So this is starting to look like it will take nearly a decade to "monetise" with it being highly unlikely to see any sp appreciation for ANOTHER TWO YEARS, unless we see a massive sustained oil price hike (unlikely imo).

My question for you my dear dan is what the f***
How is this stock anything other than a lifestyle company and complete shareholder failure.
Even if over the next the 3 years they luck out enough to claw this dog up to 2-4 cents a share it will still have been a failure for everyone bar the few who only brought exclusively at 1 cents in more recent times while avoiding having to wait FIVE+ YEARS to get a roi.
The extremely drawn out nature of this "monetisation" will be so heavily diluted by the time holding that any eventual profits by long term holders will be less then if they had invested in a decent blue chip.
All in my opinion of course, I welcome you to correct me, but given that this company will almost certainly NEVER get enough buyers support to drive significant sp appreciation it will be dependent on capital returns from the company to deliver any gains to shareholders. This in turn will likely cap the potential returns we would see.

So last question dan, do you believe in the end game shareholders will realistically see enough REALISED SHAREHOLDERS RETURNS to justify having held this as I believe the potential returns that will be seen by capital returns will be heavily diluted by opportunity cost, time holding vs roi as whole over 5 odd years. Do you think by 2026 you will have made enough on this to not regret investing in the company.

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Payback is only a technical figure though and the wells will already be paid for. The flush production will provide huge cashflow that can be used for the next batch drill along with the current producing wells. The next batch drill could be 6 to 8 wells in 2025, not 4, which would give brookside close to the 20 it promised.

I'll let the dentist provide the in depth analysis that he is so good at.

BRK Price at posting: 1.0¢ Sentiment: Hold Disclosure: Held
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