Brookside Energy Ltd (ASX:BRK) managing director David Prentice has shown confidence in the company’s oil & gas strategy with the purchase of almost 4.759 million fully paid ordinary shares through on-market trades.
The $36,774.74 purchases on March 2 and 3 have increased his overall holding in the company to almost 8 million shares held in an indirect interest.
In January 2020 Brookside chairman Michael Fry purchased 1.5 million shares through on-market trades, increasing his overall holding in the company to 5.5 million shares.
The director purchases show strong support for the company’s approach to development in the world-class Anadarko Basin, USA.
Real estate approach to development
The company’ considers its private equity (PE) model a ‘real-estate’ approach to development.
Essentially, Brookside funds acquisitions and establishes reserves then buys and sells acreage while US partner Black Mesa Energy identifies acreage and manages acquisitions, supervises drilling and operations (including mitigating risk), rewarded on performance.
Prentice said: “The application of this PE model for land, leasing and re-valuation in a publicly-traded entity is unique in Australia and provides our shareholders and investors with exposure to a part of the oil & gas business that has a very long history of generating superior returns for investors in the United States.”
The company is confident that the US$1.8 million in acreage sales to date have provided proof of concept for its business model.
Expanding acreage
The company recently secured two additional SWISH Area of Interest (SWISH AOI) units in the Anadarko Basin in Oklahoma.
The ongoing successful leasing, trading and high-grading activities have now delivered three Drilling Spacing Units (DSU’s) (Jewell, Rangers and Flames) in the core of the SWISH AOI.
Brookside managing director David Prentice said: “The addition of the Rangers and Flames DSU’s to the portfolio, alongside the Jewell unit, is a further material advancement of our strategy for unlocking value in the SWISH AOI in southern SCOOP.
“To put this in context, these three DSU’s combined are more than six-times the size of the acreage position we secured in our very successful pilot study in the STACK Play, 100-miles north along the Anadarko Basin margin.”
Proof of concept
The Sycamore-Woodford sub-play has gone from a concept to ‘proof of concept' in a very short time.
Prentice said: “Initial production results from the Sycamore and Woodford formations in this area continue to exceed our internal pre-drill expectations and while it’s early days, this area looks to have the potential to be more productive than the core areas of the STACK Play.
“The Sycamore-Woodford sub-play in southern SCOOP continues to progress rapidly with drilling and completion activity in this area now accounting for 10% of the rig count in the Anadarko Basin.
“Several of the tier-one operators are active both in terms of M&A as well as drilling and completion activity.
“This is very exciting to see and augurs well for per-acre values as the area continues to mature.”