BRK VS SHE, page-21

You make some very insightful points there Paul, especially regarding the SHE first right of refusal but no guarantee of participation.

That is exactly what happened in regards to drilling the Bullard well... the delay SHE had in raising capital for the relisting and therefore couldn't participate in drilling the well at the time mean't that BRK " broke" their model to fund their 20% participation to stump up the US $ 2 million when Rimrock, the operator fired the starting gun on the drilling. BRK paid $ 1 million up front and then jibbed the 2nd million

https://smallbusiness.chron.com/jib-accounting-34833.html

Because the Bullard was such a prolific producer during the initial 6 month period, not only were BRK able to have the full $1 million jibbed repaid to the operator out of production early , but actually had cash surpluses as the invoices were being settled. This mean't that BRK got all the flush production which effectively paid all their drilling costs back within 16 or so months...


https://asx.api.markitdigital.com/a...access_token=83ff96335c2d45a094df02a206a39ff4



and then when SHE finally raised only half the cash they wanted, they paid US$971000 for a 15.61 % wellbore interest in the Bullard, by which time the production had fallen ~80%.


https://cdn-api.markitdigital.com/a...pdf?access_token=I8w08RCufSEZMW8u3r9G7xhZrlnh



IMO, SHE will not want the same to happen with Jewell. The mid case projection of 1300-1500 BOEPD IP for Jewell is just shy of the ~1800 BOEPD IP Bullard achieved....if SHE want a meaningful interest in Jewell, circa 20%, that will cost them $US 1.6-1.8 million ( AUD $ 2- 2.3 million) which is more cash than they currently hold and will leave them with no cash to invest into an expanding Orion project, even with current modest cashflow.

The Jewell funding / drilling indicative time table has slipped a month or two by the looks of things, so Jewell cash won't hit any bank accounts till July, August at the earliest. The recent interest in SHE and subsequent run up in share price ( hopefully with much more to come so they can raise cash way above 2 cents) has IMO provided an golden opportunity to ensure they get a meaning chunk of the Jewell and subsequent cashflow, plus leave cash enough over to fund Orion and other DSU's. All this would place them in a great position to participate at higher levels in Rangers and Flames.

Exciting times for the Oklahoma twins

Cheers

Dan