Special Report: Brookside is now the proud owner of about 45 per cent of the available acres in a prospect they’ve dubbed SWISH to set up its first operated unit in the Anadarko Basin.
Managing director David Prentice says drilling their first well in a SWISH unit called Jewell “will be transformational” for Brookside (ASX:BRK).
The company is buying up and developing acreage in the prolific US oil field but until last year has relied on its local partner Black Mesa to be the operator of the fields.
Brookside is now sitting on 6,000 acres in ‘SCOOP’, a shale play whose full name is the South Central Oklahoma Oil Province.
The SCOOP play offers Brookside the opportunity to become an operator.
‘We’ve been working for 12 months on taking what we have learned in the non-operated STACK play and getting an operated position in SCOOP, because the extra leverage in doing that for shareholders is enormous,” Mr Prentice told Stockhead.
“SWISH is our prospect name for the play in SCOOP.”
Brookside has acquired about 45 per cent of the available acres in Jewell Unit and regulatory applications have been approved by the Oklahoma Corporation Commission (OCC) for development.
They plan to acquire an additional 50 per cent of the available acres in Jewell, and they’re eyeing another six high-grade development units in SWISH where Brookside can become the operator of three.
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Mr Prentice says they have reserves of 3.45 million barrels of oil equivalent (Mboe), in the STACK (Sooner Trend oil field, Anadarko basin, Canadian and Kingfisher counties) play in Oklahoma but they aren’t the company responsible for exploration and development.
Hence, the desire to join the operator ranks.
Fighting off the big guns
It’s an area that has already caught the attention of much bigger companies and private equity players.
NYSE-listed Encana Corporation is getting an average of 1044 Boe a day from an eight well site, while rival Continental Resources have highlighted enormous upside in their SCOOP project, SpringBoard.
Continental is expecting to run about 12 operating rigs in that acreage and is already producing about 13,000 gross BOE per day, with 45 wells drilled waiting on completion (including 27 targeting the Woodford and Sycamore reservoirs, where Brookside is).
Continental says they produced 6,900 Boe per day from a single seven-well unit, or drilling area.
Mr Prentice says they have seven units in the same general location.
The seven development units being targeted range in size from 320 acres to 1280 acres and to date the company controls an average of 28 per cent of the acres available to be leased in each unit.
But the plan now is to prove that their units can produce similar rates of oil and gas.
“The next catalyst for taking that from potential to reserves is to drill wells. We’re looking at getting ready to spud the first well in our SWISH play soon in the first half of this year,” Mr Prentice said.
“Getting this initial well down and producing in the Jewell Unit is so important for us, this one well has the potential to triple our current reserves of oil and gas and it will provide us with the proof of concept to move forward with the rapid development of the larger SWISH acreage position.”
Black Mesa is continuing to work on high-grading, trading, and additional leasing to firm up the final acreage position within the SWISH area of interest.