In Good Company

Just some of the notable acreage holders in the Rangers DSU that will receive  pooling orders , and will choose to either participate in the Rangers well and corresponding DSU, or be pooled and receive one of the 4-5 pooling options.

Pooling orders not yet out. When the orders are issued in the next few months it will be interesting to see :

1) What the OCC decides will be the pooling option prices per acre for the various royalty rates. Will the Sundance Kid results affect the prices?

2) Which of the " majors" will choose to participate by funding their acreage position.

There is no indication what the WI these majors hold but BRK are confident  their pooling will give  BRK at least 80% of the Rangers well and DSU.


The entire list of lease holders is extensive but have only put up these 2 pages as they contain the names of interest. I have blocked out the names and addresses of individuals.


















Citation, Continental Resources, Chesapeake, Citizen, Exxon, Chevron  and a number of material independents are some of the big hitters in the oil patch amongst those names.

They are on the list only because they have acreage in the DSU  area so their participation doesn't specifically mean a whole lot . Having said that, having those names operated by Black Mesa, whether they participate in the well/ DSU, or just receive production royalty checks if they don't, will again enhance the  operational reputation of BRK/ BM and open a whole lot of doors in terms of deal flow.  Excluding the  Black Mesa inhouse technical expertise, which " discovered" the SWISH and found a undrilled proven play at Thelma , it will be the  quality of the deal flow, rather than capital which will be the determining / constraining factor to the growth of BRK going forward.

You cannot bracket BRK/ BM into the typical US shaler that drills for production , borrows to do so and relies  primarily on high oil and gas prices for their continued success and even survival.  The PE model that BRK  has adopted and modified into a listed vehicle structure, actually needs the cycle for it's model to achieve maximum potential . This is where the buy low ( unproven, undrilled prime acreage) sell high ( proven, drilled acreage)  aspect comes into play... the production revenue obtained during the process via  moving the unproven acreage to HBP ,whilst highly beneficial is almost incidental.

The debt free structure means unlike typical production based shalers,  there is no imperative for the company to drill to grow production. While  there may be a material drop of in production revenue when there is a drilling hiatus in converting  DSU's  to HBP acreage due to timing, or asset build phase , there will be no corporate stress or anxiety. Just a focus on picking up more tier 1 unproven acreage to be able to apply for DSU's to eventually drill and carry on with that process.

Looking forward to the next " fluff" announcement where we will learn how far into the vertical hole the Rangers well has been drilled in the first week.

Cheers

Dan