There we go, that's the money post!
The lack of commentary/ analysis on it just highlights how few folks actually get how undervalued BRK is.
Straight to the top of the class @BeserkWarrioras you obviously understand the value proposition the BRK presents.
Lets analyse the crux of this post.
A 10% buy back at current prices will cost ~$5.5- 6 million dollars. The question is what does that buy ?
BRK announced in late 2020 a prospective resource in the Jewell, Rangers and Flames DSU's of ~11.6 MMBOE. This was a net/ net number being net to BRK's WI , after subtracting royalties,accounting for Black Mesa's 25% back in after payout and being a 2 stream ( oil and raw gas) reserve which means there was no consideration of NGL reserves that make up 40% of the reserve. Also excluded was the 320 acre Rangers addition which increased those reserves by 13% ... and now the latest Bruins DSU which added another 34% to the Woodford reserves or ~17% in total.
Just taking the 11.6 MMBOE , $AUD 6 million buys 10% or ~1.16MMBOE reserves which is ~$AUD 5.17 per BOE or ~$US 3.4 per BOE.
If you take into consideration the NGL reserves, the extra SWISH acreage gained since 2020 you are looking at a 3 stream reserve ( oil, NGL and processed gas) of ~20--25 MMBOE net to BRK. So the $6 million buys 2-2.5 MMBOE of PDP, PUD and prospective resources ( will become PDP and PUD once Bruins is drilled) or ~$AUD 2.4 - $AUD 3 per BOE or ~US$ 1.6 - US$ 2 per BOE.
Just for comparison, in 2021 BRK paid ~US$ 8.30 per BOE or ~$AUD 12.5 for the mainly gas (90% of the reserve and production stream) legacy low decline wells it vended into the STACK JV. It was very happy to pay that price.
https://investorhub.brookside-energy.com.au/3859208
The SWISH reserves are liquid rich with oil and NGL's making up 60-70% which makes those reserves higher value than dry gas. For example purposes only ,if you attribute the same $AUD 12.5 per BOE to the SWISH, the ASX is valuing BRK reserves at 20-25% of what BRK paid for an inferior production stream in a asset they knew very well. What would tier 1 reserves in the Anadarko basin be worth on the market today is the $64 million question. Anyone care to do some research to find what assets like this sell ? It certainly is closer to the US$8 per BOE or more than to US$ 1.6-2 current market value....and US$ 8 per BOE may not be enough to move the dial for BRK to sell.
In addition, the $6 million also buys $2 million in cash ( 10% of say $26 million -$6 million at March 30), buys 10% of the SWISH non operated reserves and non SWISH reserves of ~3 MMBOE and 10% of the Bradbury AOI including the Juanita well..
It is bleeding obvious BRK are incredibly undervalued, so the question is as you put it with a little twist, if the market won't buy it, can BRK afford NOT to buy back at these prices ( while the opportunity lasts)
Thanks for your excellent and incisive post.
Cheers
Dan
(20min delay)