First Operated SWISH Development Unit Secured
Regulatory Applications Approved
ASX Announcement 27 March 2019
Perth, Western Australia – March 27, 2019 - Brookside Energy Limited (ASX: BRK) (Brookside or the Company) is pleased to provide shareholders and investors with an update on activities within the Company’s SWISH AOI in the world-class SCOOP Play in the Anadarko Basin, Oklahoma.
- Highlights
Brookside has now acquired ~45% of the available acres in its first operated highgrade development unit within the SWISH AOI - Jewell Unit - Pre-requisite regulatory applications have now also been approved by the Oklahoma Corporation Commission (OCC) for this development unit
- Company now expects to acquire an additional ~50% of the available acres in this unit via the OCC pooling process, taking the Company’s final Working Interest in the Jewell Unit to ~95%i
- Surface location rights for the initial or parent well have already been acquired and surveying and staking operations have been completed
- Focus has now turned to the further six high-grade development unitsii in the SWISH AOI, where Brookside has the opportunity to establish an operated position in three additional development units
Commenting on the announcement, Brookside Managing Director, David Prentice said:
“This is another tremendous milestone for Brookside as we rapidly progress along the path to unlocking the very significant value we see in our SWISH AOI in the world-class SCOOP Play in Oklahoma.
“The Black Mesa team continue to deliver for us on the ground in Oklahoma (in a very competitive environment) and winning operations on our first high-grade development unit is a Company making moment for Brookside.
“The successful drilling and production testing of the our first operated well in the SWISH AOI will be transformational for Brookside, unlocking very significant value in terms of proved undeveloped reserves and in providing proof or concept for the larger acreage position we are putting together in this highly sort after portion of the SCOOP Play”
Background
As announced on February 27, 2019, the Company’s SWISH AOI leasing campaign has delivered a potential ~6,000-acre position iii in the liquids-gas condensate core of the Woodford-Sycamore Trend of the SCOOP Play.
Brookside is focussed on seven high-grade development units within the SWISH AOI with the opportunity to establish a high working interest (operated position) in four of these units.
Our ongoing efforts to high-grade, trade and space and pool acreage within the SWISH AOI have delivered our first operated high-grade unit, with Brookside having now acquired ~45% of the available acres in the Jewell Unit.
Pre-requisite regulatory applications have now also been approved by the Oklahoma Corporation Commission (OCC) for this development unit and the Company now expects to acquire an additional ~50% of the available acres in this unit via the OCC pooling process, taking the Company’s final Working Interest in the Jewell Unit to ~95%.
Surface location rights for the initial or parent well in the Jewell Unit have already been acquired and surveying and staking operations have been completed (figure 1. Below shows the staked location of the Jewell well).
The Company’s focus has now turned to the further six high-grade development units in the SWISH AOI, where Brookside has the opportunity to establish an operated position in three additional development units.
SCOOP Play Woodford Well Continues to Outperform
Delivers Strong Cash Flows and Reserve Potential
Perth, Western Australia – March 7, 2019 - Brookside Energy Limited (ASX: BRK) (Brookside or the Company) is pleased to provide shareholders and investors with a production update from its first Woodford Well in the world-class SCOOP Play in the Anadarko Basin, Oklahoma.
Highlights
- Bullard #1-18-07UWHi,ii well has continued to deliver strong, sustained results from the Woodford Shale, with the well having now produced in excess of 160,000 BOE (59% oil) in its first 4 ½ months of production
- This well continues to perform above pre-drill estimates, flagging the potential for Brookside to book significant proved undeveloped reserves in this development unit when the annual review of the Company’s oil and gas reserves is completed •
- Brookside’s share of net revenueiii from this well has already returned ~60% of the drilling and completion capex (Brookside’s share estimated to be US$2,000,000) and the well looks set to achieve pay-out in less than 2-years
- Bullard #1-18-07UWH well is located approximately five-miles north of Brookside’s SWISH AOI and these results together with other recent success from third-party operators in the area validates our view that the Woodford Shale has very significant production and reserve potential in this part of the SCOOP Play
Commenting on the announcement, Brookside Managing Director, David Prentice said:
“This well continues to surprise on the upside, with very strong sustained production and cash flow from the Woodford Shale in a part of the SCOOP Play where the geology and position on the Anadarko Basin margin correlates very strongly with our acreage in the SWISH AOI further to the south.
“It is very pleasing to have such a strong data point in the Woodford Shale (with the Bullard well performing significantly above our pre-drill estimates) when we are on the cusp of kicking off our operated drilling program in SWISH.
“This is a very exciting period for our shareholders as we transition from our non-operated position in the STACK Play to a much larger operated position in SCOOP. This will provide the platform for transformational growth in terms of acreage and reserve growth.”
Background
The Company’s non-operated Working Interest wells in the world-class Anadarko Basin plays continue to deliver excellent “sustained” production rates providing further support for the quality of the acreage that Brookside has been able to secure within the Anadarko Basin in Oklahoma.
The Rimrock Resource Operating, LLC. operated Bullard #1-18-07UWH well (Brookside 20.57% Working Interest) has produced approximately 160,000 BOE (59% oil) in 41/2 months (~95,000 barrels of oil and 428,000 Mcf gas). See Figure 1. below.
These production results are being achieved from a horizontal well bore with a 7,500-foot lateral producing at a depth of approximately 8,050 feet in the “volatile oil window” of the Woodford Shale formation. The well is currently producing full open flow through a 64/64-inch choke on gas lift.
Net revenue (net to Brookside) from this well for its first four months of production is estimated to be ~US$1,200,000, with approximately 60% of the Working Interest share of drilling and completion capex recovered in this period.
Production from this well continues to exceed our pre-drill estimates, flagging the potential for Brookside to book significant proved undeveloped reserves in this development unit when the annual review of the Company’s oil and gas reserves is completed. The Company is estimating up to six additional potential well locations within this development unit.
The Bullard #1-18-07UWH well provides another very strong “data point” for the reserve potential of the Woodford Shale in this area and further justification for higher per-acre valuations in the SCOOP Play generally. Significantly this well is located adjacent to (approximately 5-miles north) the Company’s SWISH AOI, which is the focus of the current leasing campaign. These initial production results provide the Company with further confirmation of the productivity of the Woodford Shale in this part of the SCOOP Play and validate our SWISH acreage acquisition strategy were the Company is targeting both the Sycamore and Woodford Formations.
ANADARKO BASIN, OKLAHOMA
The Anadarko Basin is a geologic feature covering approximately fifty thousand square miles primarily in west-central Oklahoma, but including the upper Texas Panhandle, southwestern Kansas, and south-eastern Colorado. The basin contains sedimentary deposits ranging in thickness from two thousand feet on its northern and western flanks to forty thousand feet in its southern portion. Significant oil and gas discoveries have been made throughout this region, including the Hugoton-Panhandle Gas Field of Kansas, Oklahoma, and Texas in the 1920’s and numerous others in Oklahoma, such as the West Edmond Field, the Union City Field, and the Elk City Field, after 1950.
The Anadarko Basin is recognised as a heavyweight among United States shale regions in terms of oil and natural gas production. The basin has a long history of oil and gas production with current production estimated to be in the order of 600,000 barrels of oil equivalent per day.
The combination of science, technological advancement, and experimentation over the last three years (in a sub US$60 oil price environment) has led to broad productivity gains across the so called shale regions. The implementation of these improved drilling and development techniques has seen a dramatic surge in activity across the Anadarko Basin. The region’s current active rig count of 129 is behind only the Permian Basin in Texas, with the Anadarko Basin recognised as sitting among the top most productive oil and gas regions based on EIA data.
The majority of the activity within the Anadarko Basin is centred on the STACK (Sooner Trend Anadarko Canadian and Kingfisher) and SCOOP (South Central Oklahoma Oil Province) plays of Oklahoma.
Current estimates point to annual drilling and completion capital expenditure across the STACK and SCOOP Plays at in excess of US$3.0 billion. This investment is driven largely by the productivity of the wells being drilled in these plays, with IHS estimating a break-even point of under US$30 per barrel for the top producing wells in the STACK Play, which is comparable to wells drilled in the top Permian plays.
The Company commenced its leasing campaign in the STACK and SCOOP Plays in early 2016 and this program is currently ongoing. Further details in relation to the Company’s holdings across the STACK and SCOOP Plays can be found via disclosures listed under the Investors tab.
