Brookside Energy’s latest well is a gusher, sending shares up 23pc
Special report: Brookside Energy has delivered record initial production rates at its most recent well, delivering 154,000 barrels of oil equivalent (boe) in its first 38 days.
That news sent the stock surging 23 per cent to an intraday high of 1.6c. The shares closed 1.5c.
Flow rates for the well, located in the STACK play in the Cana Wet Gas part of the company’s Blaine County focus, are hitting 5,400 boe per day.
The so-called STACK and SCOOP plays in Oklahoma’s Anadarko Basin have been described as two of the “hottest new areas” for oil development in the US.
Brookside (ASX:BRK) buys cheap undeveloped oil leases Oklahoma, develops them to prove the underlying oil reserves, then looks to sell the acreage for a tidy profit.
The 30-day production rate at the STAC play is 4,200 boe per day.
Those rates put the well within the top six highest producers drilled in the STACK play to date.
What’s more, 15 per cent of production or about 860 barrels a day so far has been oil, a commodity currently fetching spot prices of around $US66 a barrel.
Brookside (ASX:BRK) says the well looks set to pay for itself in less than 18 months.
The initial production rate is 3.5 times higher than its parent well in the STACK acreage which was recently sold for $38,000 an acre.
“Excellent initial production rates like these continue to demonstrate the very high productivity and reserve potential of wells being drilled across the Anadarko Basin plays and ultimately justify further increases in per acre valuations,” said Brookside managing director David Prentice.
Brookside owns a 2 per cent interest in this well, and the associated 1,280-acre Development Unit that it was drilled in.
The initial production data from this well alongside sustained longer-term production data will be used to establish the quantity of recoverable undeveloped oil and gas contained within the Development Unit and the associated value per acre.