• Brookside Energy spuds first of four wells at Flames-Maroons Development Plan
  • FMDP will supercharge net production to 2,500boe per day by the end of 2024
  • Development will unlock an estimated $261m worth of low-cost, high margin reserves

 

Special Report: Brookside Energy aims to unlock significant value at its Flames-Maroons Development Plan with the first of four wells having been successfully spud.

Brookside Energy (ASX:BRK) has kicked off a multi-well drilling program aimed at monetising its Flames-Maroons Development Plan (FMDP) in the core of the southern SCOOP Play in the Anadarko Basin, a proven Tier-1 oil and gas jurisdiction in the US.

The company flagged late last year that these planned wells are expected to be producing later in 2024, substantially increasing output by 67% to 2,500 BOE per day (78% liquids).

These 11.9 million barrels of oil equivalent (BOE) low-cost, high-margin, liquids-rich reserves have an estimated net present worth of $US170.5m ($261m) to BRK.

The Kenai Rig 19 has started drilling the Iginla well before it moves to the Maroons well and then onto the Fleury well.

BRK managing director David Prentice said the multi-well project will be “transformational” for the company.

“We have been diligently working towards this positive development for some time, with extensive efforts behind the scenes to facilitate the start of drilling operations,” he said.

“With drilling now under way, we have a clear focus to work safely and efficiently to unlock the significant value in the FMDP.”

Cashed-up and debt-free, BRK delivered another strong financial result in the final quarter of 2023 with a 33% year-on-year increase in net production from the SWISH Area of Interest (AOI) in Oklahoma.

The company booked $12.2m in cash receipts, with positive operating cash flow of $3.1m. A strong cash position of $26.2m enabled BRK to self-fund the drilling program at the FMDP.

It has recently completed a 10% share buyback and has flagged plans for a further buyback upon the completion of the FMDP.

Importantly, the increase to production anticipated to eventuate from the FMDP will place BRK in the top tier of small-cap ASX oil and gas producers.

The company has been closely watching Continental Resources’ nearby successful Courbet full field development, located immediately adjacent to and south of the FMDP, and early results have been extremely encouraging, especially in terms of reducing capital intensity of development activity.

The successful 15-well program to simultaneously develop the Sycamore and Woodford formations has now been on production for about six months and has already produced over 2 million barrels of oil and 11 billion cubic feet of gas.

The FMDP is forecast to produce 715,000 BOE net to BRK in its first year of operation and average ~2,000 BOEPD net over the same period.

BRK estimates its total net production rate will reach 2,500 BOEPD (78% liquids) before the end of next year.

Anticipated growth in cash flow and rapid well payouts will support subsequent development phases of the Bruins, Jewell, and Rangers DSUs, and other growth opportunities.

 

 

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.

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