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BRK - BROOKSIDE ENERGY LIMITED


Chilledpain
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Hi all,

 

Thought I'd introduce BRK - Brookside Energy as there doesn't seem to be a thread currently.

 

I believe this company is severely undervalued based on asset value alone.

Background:

 

Oil and gas (real estate) company based in Perth WA - Operating in Anadarko USA.

 

Currently holding 2700 acres - in pooling process to secure an additional ~4000-6000 acres.

 

Not a producer - more of a land developer of oil and gas assets. BRK buys up leases, allows drilling by a 3rd party to prove up oil and gas reserves, land / leases are revalued accordingly. End goal is to build up assets and ultimately on-sell as a package.

 

Maiden reserve report shows AUD 18m in reserves for their 400 STACK acres alone.

 

Companies operating in BRK's AOI are bidding up to $10k per acre according to the OK Mineral Rights forum which would value BRK well above their current SP.

 

Well results in their AOI (SWISH) providing exceptional results - See Continental Springboard Project.

 

Current SP: 0.009

Market Cap: AUD $8.993m

Estimated Asset Value: AUD ~$37m (Based on $10,000 an acre + maiden reserves report discounted at 30% from NPV10)

 

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Update:

 

Brookside has just increased their SCOOP acreage holdings to 2500 acres.

 

Land just 2 sections north of BRKâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s AOI (near Continentals Springboard Project) is getting offers of up to $25,000USD ($36,000) an acre. (UNDEVELOPED) âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Check out the Oklahoma Mineral Rights forum for discussion on Stephens County for offers given to land owners.

 

Brooksideâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s AOI has plenty of geological data from old wells and BRK got in early thus was able to cherry pick (due to the acreage looking like it was already leased but wasnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ as soon as the majors found out, they went all out securing everything they could. BRK is onto a winner geo wise)

 

Brookside just negotiated their way into land swap deals and step-in agreements which has netted approx. 3m back into their bank account this quarter. Thatâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s $3m cash ready to go for new projects for a $10m MC.

 

Their first fully operated DSU is about to get underway âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ the Jewell well.

 

Their strike rate so far on wells (on their land) has been 100% with decent IP flow rates on all wells bar one (which is still in production).

 

Their maiden reserve report for their 400 STACK acres came in at $18m AUD NPV10.

 

The Jewell well has the potential to triple their current reserves.

 

Now before you go and check the 4C âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ note, this company is NOT a producer and they are not after revenue from wells. They generally allow other companies to come in and drill to keep all the proceeds âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ they are after one thing: The oil and gas reserves (which in turn increases land value). Once a well is drilled, they are able to calculate the remaining value of the O&G reserves in the ground and revalue the land accordingly. Building value through assets.

 

Breaking down BRK assets and liabilities:

 

SWISH Acres (current) assuming just $10k USD per acre (as mentioned, bids up to $25000per acre received in sections just 2 ranges above BRKâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s AOI) x 2500 acres = $25m USD - converted to AUD = ~A$36m.

 

STACK Acres NPV10 Reserves @ ~A$18m minus ~30% (20-30% discount typical in event of sale) = ~A$12m.

 

Total Value of assets: ~A$48m.

 

BRK also own a 17% stake in Black Mesa - Value unknown.

 

Minus loan facilities:

 

Leasing Facility: ~A$4.2m

 

***Note the STACK Drilling Joint Venture: ~A$4.8m is NOT a BRK loan when reviewing the presentations***

 

Total: ~A$43m (or 4.3cps)

 

Current SP: ~1.0cps

 

Current market cap: $10m

 

I am battling to find a chink in BRKâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s armor at the moment so if anyone has any reason why the calculations above arenâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t on the money, Iâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢d love to hear it.

 

Even at half the land value ie: $5kUSD per acre, still shows a value of ~$25m AUD or 2.5cps.

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  • 2 years later...

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