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Special report: Brookside Energy’s first oil well in the Anadarko region has covered its costs in just 11 months.

The company (ASX:BRK) has received $US230,000 ($320,000) in revenue the last 12 months from the Landreth BIA 1-14H well for its 2.5 per cent stake.

The well is operated by storied US oil company Marathon, but Brookside is set to receive 75 per cent of future net revenue now that costs have been recovered.

Brookside buys cheap undeveloped oil leases in Oklahoma, develops them to prove the underlying oil reserves, then looks to sell the acreage for a tidy profit.

The well produced about 342,000 barrels of oil equivalent (boe) in the first 12 months of production with 61 per cent of that being oil.

Importantly, about 70 per cent of the total forecast net revenue for this well is generated in the first 28 months of its operation.

Brookside is right in the middle of one of the USA's key oil and gas areas.
Brookside is right in the middle of one of the USA’s key oil and gas areas.

This very strong “capital recycle rate” is a driver of increased drilling and completion activity, more high quality oil and gas reserves and ultimately higher per acre valuations.

Brookside managing director David Prentice says for a well to cover all of its costs in just 11 months in the current pricing environment is “remarkable”.

“The Anadarko Basin Plays continue to deliver excellent reservoir quality rock that is driving outstanding economics and supports higher per acre valuations,” he said.

“We are very much looking forward to replicating this kind of result in some of our higher working interest wells and ultimately into our SWISH opportunity where we are focused on securing much larger working interests.

“Our non-operated working interest wells keep delivering and the opportunity to “scale this up” as we increase our Anadarko basin land holdings is very exciting.”

Brookside (ASX:BRK) owns leases over oil plays in the Anadarko Basin dubbed STACK, SCOOP and more latterly SWISH.

The so-called STACK and SCOOP plays have been described as two of the “hottest new areas” for oil development in the US.

The Landreth well is flowing oil at 2650 boe a day, with a total of 208,000 barrels of oil and 801,000 Mcf (thousand cubic feet) gas in its first 12 months of production.

 

This special report is brought to you by Brookside Energy.

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