Brookside Energy Ltd (ASX:BRK) has secured $9 million in new proceeds following a capital raise to fund development activities at its Rangers Well, an oil and gas asset within the company’s “core of the core” position in Oklahoma’s Anadarko Basin.
The heavily oversubscribed placement witnessed very strong support from a mix of new and existing shareholders locally and overseas, including several new high net worth investors looking for exposure to the oil and gas sector.
Proceeds from the placement will be used to increase the company’s position in the Rangers Drilling Spacing Unit (DSU) and to fund a majority working interest in the development of the Rangers Well in the SWISH Area of Interest (AOI) — its key landholding within the world-class oil and gas basin.
After the Jewell Well, where production is imminent, Rangers represents the second well in a potential five-year, 20-plus well development program that Brookside is executing over the SWISH AOI.
“Pleased to welcome our new overseas investors”
Brookside managing director David Prentice said: “We are delighted with the response we have received from our existing shareholders (and from new investors) to this placement and would like to thank CPS Capital Group for assisting us with this very successful raising.
“We are especially pleased to welcome our new overseas investors as we continue to expand our international investor base.
“This raising will enable us to increase our operational momentum, increase our working interest in future developments and to make sure we can lock in key services when they are available to avoid delays.”
Capital raising
The company appointed CPS Capital Group Pty Ltd to act as lead manager and broker to the placement.
Under the terms of the placement, the company has agreed to issue up to 300,000,000 fully paid ordinary shares to sophisticated and professional investors at $0.03 per share to raise up to $9 million.
The ASX-listed company will also issue one free attaching listed option, exercisable at $0.011 per option with expiry on June 30, 2022, for every three shares subscribed.
"Core of the core" acreage position
Ultimately, Brookside has its sights set on developing its "core of the core" acreage position in the SWISH AOI, located in the highly sought-after Sycamore-Woodford trend in the southern SCOOP Play within the Anadarko Basin.
To unlock the oil & gas asset’s potential, the ASX-listed energy company has crafted a five-year, 20-plus well inventory strategy, centred on its three operated development areas (Jewell, Flames, Rangers) to develop a conservatively estimated 11,606,000 net barrels of oil equivalent (BOE) prospective resource.
Prentice said: “Faster development with majority working interests translates to more rapid growth in terms of both oil and gas reserves and cash flow.
“This is a very exciting time for the company and the team at Black Mesa Energy and we are obviously thrilled that we are now in a position to move forward aggressively with the continued development of our SWISH AOI acreage.”
SWISH activity map showing the location of Brookside DSUs.
Two primary producing formations
Initial wells drilled in the SWISH AOI will be targeting one of two primary producing formations in the SWISH AOI: the Sycamore formation.
The Sycamore formation continues to deliver outstanding sustained productivity in nearby offsetting wells.
Future wells will also target the Woodford formation, which, just like the Sycamore formation, continues to deliver outstanding sustained productivity in nearby offsetting wells.
To date, a Casillas Operating, LLC-operated well, around three miles west of the Jewell DSU, has produced around 580,000 BOE over 19 months — considerably higher than Brookside’s conservative estimate for the Jewell Well.
The Continental Resources Inc-operated Courbet well, around one mile southwest of the Jewell DSU, has produced roughly 430,000 BOE in approximately 14 months.
Interestingly, the production rate of the Courbet well is considerably higher than BRK’s conservative estimate for the Jewell Well.
Prentice said: “Shareholders and investors can look forward to a considerable amount of news over the coming weeks and months as we complete the Jewell Well and turn it to sales while at the same time, we lock in the timetable for the Rangers Well.”