Brookside Energy Ltd (ASX:BRK) has reflected on the first half of 2021 as it advances its development strategy over its acreage within a tier-one oil and gas jurisdiction, the Anadarko oil and gas basin in Oklahoma.
In its latest half-year cycle, covering January to June of this year, the energy company listed on the Frankfurt Stock Exchange, drilled the pioneer Jewell Well asset, executed an $8.3 million capital raise and acquired 11 producing wells within a key oil and gas play in the basin.
Primarily, Brookside’s activity for the half centred on advancing the Jewell Well as part of its wider development strategy — an asset that entered commercial production earlier this week.
Heading into 2021’s second half, Brookside has nearly $8.6 million in the bank to support its future operations.
The crown Jewell
For Brookside, this half marked the start of a new chapter that’s centred on production in Oklahoma’s world-class Anadarko Basin — a tier-one district that’s seen plenty of exploration in the past.
It all kicked off in May, when the explorer began drilling at the Jewell Well — the first in a five-year, 20-plus well development program centred on Brookside’s three owned and operated drill spacing units (DSUs).
All three tenements — known as the Jewell, Rangers and Flames DSUs — sit within the SWISH Area of Interest (AOI), the epicentre of one of two oil and gas plays where Brookside’s interest lies.
Over the rest of 2021’s first half, Brookside completed drilling at Jewell and moved into construction mode to prepare the asset for production.
On June 29, natural gas giant ExxonMobil Corporation took up a 4.5% working interest in the broader Jewell DSU, while private energy titan Citation Oil and Gas Corporation soon followed suit with a 2.3% take-up.
A further 5.7% working interest was taken up by a combination of private equity and smaller private oil and gas firms.
Managing director David Prentice said the participation represented a vote of confidence in Brookside’s Anadarko acreage.
Fast forward to the present, and just days after releasing its interim report, Brookside announced another breakthrough: the Jewell Well entered commercial production just four months after it was spudded.
Prentice described the moment as a “major milestone in the early life of the company”.
Power(ing) Rangers
With much of the activity over 2021’s first half centred on Jewell, attention has since turned to the second target in Brookside’s development strategy: the Rangers Well.
In early July, the oil and gas explorer secured further acreage in the Anadarko Basin, acquiring land next to the Rangers DSU and expanding its ‘core of the core’ holding in the tier-one region.
Then, just a few weeks later, Brookside announced a $9 million capital raise to fund the Rangers Well’s development.
Prentice explained: “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.”
Work underway on properties within the SWISH AOI.
Since then, the ASX-lister has used the funding to kick off pad construction at Rangers. Last week, it secured a drilling rig to commence work on the well in the near future.
Once drilling begins, Rangers will be the second well to enter development under Brookside’s five-year, 20-plus well inventory strategy.
Financials
With Jewell only just entering production, Brookside is yet to see the fruits of its labour in this area reflected on the balance sheet.
However, the interim financials indicate the oil and gas explorer did turn a gross profit of $331,674 over the period.
Ultimately, it’s not yet enough to return from the red: the net loss for the half-year hit $2.1 million, up from the previous corresponding half’s $1.5 million result.
Brookside’s current assets stand at $8.7 million, a marked increase on the $1.4 million statistic six months earlier.
The company’s equity now totals nearly $20 million, while it holds $8.6 million in the bank to continue its development strategy.
Thia cash balance marks a strong increase on the previous corresponding half, when Brookside had just $625,000 tucked away.
That’s because of a key capital raising the company executed over the half, bringing in $8.3 million to drill and complete the Jewell Well.
CPS Capital led and brokered the placement, which saw 1.1 billion shares reach sophisticated and professional investors at $0.0075 apiece.
Corporate-wise, in a bid to broaden its overseas investor base and increase its corporate profile, Brookside listed on the FSE in mid-May.
Speaking to the move, Prentice said: “We are looking forward to keeping all of our shareholders and investors that are new to our story up to date as we continue to build on this operational momentum in the Anadarko Basin.”