Banter and General Comments .. BRK, page-6632

Geez mate, let’s try to get our numbers right before we go on a self propagating cascade of misinterpretation and supposition like this.

You are correct that gross cash at end Q2 was AUD $ 31.6 million. But they had payables for Flames completion and CN. After paying back the CN for Flames funding ( $ 8.25 million ) and Flames completion ($7 million) in July that leaves net cash ~ $ AUD $ 16 million.

Cash flow for Q3 will AUD $ 11-13 million as will have 3 full months of Rangers receipts rather 1 full month (May) as June production was paid in July… plus Flames production which will compensate for any Jewell decline and the fall in oil prices. The other main outflows in Q3 will be admin and land leasing cost ~ $2-3 million. So net cash at end Q3 should be $ 24-27 million, a substantial improvement on Q2.

Cost inflation is not such that a HZ well will cost US $ 20 million, at 20% inflation a well may be up to US $ 12 million but that is on a 100% basis… BRK have 80% WI max in these wells so their costs are less than the full amount by 20%.

I won’t discuss the treatment of Black Mesa in the BRK accounts , the affect of their back in and the BM requirement to fund their 25% of the BRK WI in the new wells. BM are fully consolidated in the BRK accounts for now as BRK have full control of their cash and assets despite owning 50% of the equity.

If your “ common sense” tells you that the reason why BRK haven’t started drilling those SWISH wells because
BRK can’t afford it, then you need to recalibrate your common sense. This is where doing real DD comes in and if you did that, you would know that you can’t drill wells without permits…. I have described the process adnauseam so won’t repeat it.

You can then say they should already have the permits and again that has been “ explained”…. You can then say the company should announce this but that would be accused of being a fluff announcement, and they previously never announced the permits of any wells / DSU until the final outcome of the court process as that is BAU.

Agree that time is running out for 2 SWISH wells to be drilled and completed by Christmas, but as mentioned, the timetable is court process driven, not funding driven.

If permits allow drilling early in the Dec quarter, then cash on hand, plus cashflow will be more than enough for them to fully fund the next 2 wells, and may even allow them to drill back to back… even with the lower oil prices as Flames will have 3 full months of production, which if the well comes in around, expectations will more than compensate for the decline in Jewell, possible decline in Rangers.

@TheProfessional ‘s analysis talks about a range of “ value” per share, not stating the share price will be.. and that valuation is based on a NPV calculation of production of the 21 well program (at a long dated commodity price curve ) of which only 3 have been drilled .

Again , this is a complete lack of comprehension and understanding by many here of what something may be worth on a value basis, and the current share price , which currently are miles apart.

No one here has the ability to make any sort at valuation calculation which , which just in case you may not be aware, is pretty well how the oil/ gas “ professionals” in the industry do it.

I challenge someone else to do their own “ valuation” of BRK based on a real method, rather than just referring to the share price only… how the hell do you guys know if something is cheap or expensive unless you know how to value it?… @TheProfessional has done this and put up the results for all to see for free.

So in regards to a CR to drill the next 2 SWISH wells, I call absolute bullocks… they may even throw in a Bradbury well in the mix as hinted at the last quarterly.

Dan