Brookside buy-back to support NYSE listing, bolster growth strategy

• The buy-back involves up to 4.8 million shares (~5% of issued capital), priced at A$0.40 and runs until June 2026, unless completed earlier
• Brookside boasts a debt-free balance sheet with A$13 million in cash and a US$25 million undrawn facility for further development
• Via the NYSE ADR listing the Australian company aims to close a valuation gap with American peers and attract larger numbers of energy-focused investors

Special Report: Brookside Energy will launch an on-market share buy-back to support its New York Stock Exchange ADR listing, with both initiatives slated for the second half of this year.

The Australian junior has been on a roll with its proven, high-margin production in Oklahoma’s world-class Anadarko Basin and the on-market buy-back of approximately A$1.92 million has been designed to support its continued growth.

The buy-back is based on the current share price of ~A$0.40 and involves up to 4.8 million fully paid ordinary shares, representing approximately 5% of Brookside Energy’s (ASX:BRK) issued capital.

Thanks to its lean and smart operations, Brookside has a strong balance sheet with no debt, A$13 million in cash and receivables, and an undrawn US$25 million credit facility supporting fully funded development. 

The buy-back will start this quarter and remain in place through to 30 June 2026, unless completed earlier.

“This initiative is consistent with Brookside’s disciplined capital allocation strategy, which is built around our three core pillars: Grow Production, Build Scale and Return Capital,” managing director David Prentice said.

“In the current macroeconomic environment, we believe that a share buy-back represents a prudent and value-accretive use of capital.

“The company will only buy back shares where it considers the action to be in the best interests of shareholders and consistent with disciplined capital management.”

Prentice said the exact timing and scale of any purchases would be subject to market conditions, trading volumes and the company’s assessment of alternative capital deployment opportunities.

“Should market conditions change, such as a material increase in oil prices or the emergence of attractive growth or acquisition opportunities, capital may be redirected accordingly towards development or expansion,” he said.

Trading at a significant discount to US listed peers, Brookside has significant potential to grow its value by tapping into the strong interest in the energy sector among American investors.

Brookside has secured a strategic position in Oklahoma’s SWISH Play where it is surrounded by tier-one American operators including Continental Resources, Mach Resources, Citation Oil & Gas and Ovintiv.

BRK has just added a fifth drilling spacing unit (DSU) to its inventory of high-quality, low-risk development drilling locations within the SWISH Play in a highly sought-after oil and gas region. 

Brookside sees even more scope for resource upside in the “stacked pay” potential of the Caney Shale and Simpson Group sands.

Stacked pay is a key attribute of leading resource plays where multiple hydrocarbon-bearing formations can be accessed from a single surface location, significantly improving capital efficiency and long-term recovery.

This article was developed in collaboration with Brookside Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.