For the Jewell well, SHE farmed in for a 41.5% WI.How this works...

For the Jewell well, SHE farmed in for a 41.5% WI.

How this works out to become 31.125% one needs to understand how the BRK / Black Mesa operation works.

BM are the operating entity for BRK in the USA… the corporate structure is such that BRK own 50% of BM, and BM executives own the other 50% as sweat equity. This SW doesn’t vest until BM pay back BRK initial investment seed capital as a dividend. Until that happens BRK effectively own 100% of BM.

BM source and operate BRK’s assets in the USA… the payment for sourcing and operating the assets is BM get a 25 % back into the assets after they pay out. So if BM source a project for BRK where the WI is 80 %, once the project pays out, the BRK WI falls to 60% and BM get 20. %

This applies to investments BRK sell, farm out to 3rd parties and therefore to SHE

So when SHE farmed in to the Jewell well, the 25% back in after payout applies to the 41.5% WI which is why it should now be 31.125% as Jewell paid out in 2022.

BRK show their WI in Jewell increased by ~10% over the ~42% they had after the farmout . This is because as they effectively own BM, when Jewell paid out, their WI didn’t change, and they “ picked up” the ~ 10% from SHE.

It could be that SHE record their interest at the farm in WI, but pay BM their 25% out of the net revenue they receive from the well. That is the only reason why I can see for SHE not to have BM back in showing .

Yes, I am a shareholder in BRK but an keeping a much closer eye on SHE now they seem to have a Canadian technical team and a decent cash pile with growing cashflow.