Pretty everyone seems baffled.
Food for thought. BRK at 1.7 cents is way less risky at these levels than it was last year before Jewell was successfully drilled, and we had no idea how good Rangers may be thanks to the spectacular production coming out of Sundance Kid.
So , apart from hydrocarbon producers being supposedly out of favour at a time of very high commodity prices with all the macro indicators pointing to them staying elevated for a prolonged period , one needs to ask what possibly could be happening?
Making a list of possible causes of this “ illogical” value/ price disparity may bring a lightbulb moment. I would say the options may have something to do with it, (but not because of the gift ITMO of August last year ) and a clear understanding by some folks of the true value of BRK.
A few posters have already alluded to what they think is happening and I agree with them.. rhymes with “bee stake”
Thinking logically rather than emotionally coupled with the understanding of what BRK are about to achieve based on all the information we know should be a source of high anticipation and excitement.
We know after BRK drill the 3 initial wells they will progress the 20 well development plan, which doesn’t mean they will drill all of them. David said that again in the latest Proactive interview. Yes he has repeated what he has said before but has any of that sunk in to what that means and the consequences of his statement.
Let me spell it out , when Rangers and Flames are producing, and DP said in the Proactive interview, by mid year all 3 wells will be drilled, BRK will be producing ~ 2500 -3000BOEPD by the end of the 3rd quarter if the 2 new wells emulate the Jewell. The cashflow produced should allow BRK to drill 2-3 wells a year, and if I am correct and they only will drill the Sycamore, then by early 2023 , including decline, BRK should be producing ~ 7000 BOEPD.
To achieve this they do not need a CR, but will need a good proportion of the outstanding options exercised to help fund the Flames… after that they will also be able to build significant cash with selling the Woodford PUD’s if they choose to do so.
By 2023, despite their model not being predicated on drilling for production, the opportunity to cash in on these very high prices, will mean BRK will be on of the largest smal- medium size producers on the ASX, below Karoon, and around SXY , Cooper Energy production rates…and all organically, in house generated.
That is the first stage of the future I see and when it eventuates let’s see what the share price discussion points will be.
Dan
Cheers
Dan
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