Brookside Energy Ltd (ASX:BRK) (OTCMKTS:RDFEF) is fully-funded to drill and complete the much-anticipated Jewell Well in the SWISH AOI of Oklahoma, USA, after an A$8.25 million capital raising, with shares up as much as 50%.
The oversubscribed placement to sophisticated and professional investors attracted very strong support from a mix of new and existing shareholders, including several new high net worth investors looking for exposure to the oil and gas sector.
Brookside will now progress drilling plans at the Jewell Well, which sits in the highly-sought after Sycamore-Woodford Trend in the company’s SWISH Area of Interest (AOI) in the world-class Anadarko Basin.
“Moving forward with drilling”
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.
“This raising will enable us to move forward with our transformational operated drilling program, kicking-off immediately with the highly anticipated Jewell Well in our SWISH AOI in the SCOOP Play.”
Investors welcomed the news with shares as much as 50 per cent higher to 1.2 cents intra-day on strong volume of almost 164 million.
“Proven by neighbouring production”
Drilling of the Jewell Well looks set to be transformational for Brookside and the catalyst to unlock the value of a conservatively estimated 11.606 million net barrels of oil equivalent (BOE) prospective resource that the company has booked across its three SWISH AOI DSU’s (Jewell, Flames and Rangers).
Prentice said: “Our acreage in this area is proven by neighbouring production with results from tier-one operators active in the area - Continental Resources Inc (NYSE:CLR) (FRA:C5L), Devon Energy Corp (NYSE:DVN) (FRA:DY6) (ETR:DY6) (BMV:DVN), Marathon Oil Corporation (NYSE:MRO) (FRA:USS) (BMV:MRO) (ETR:USS) and Ovintiv Inc (NYSE:OVV) (TSE:OVV) (FRA:47Q) - materially exceeding our expectations, including initial flow rates above 2,000 barrels of oil equivalent seen in offsetting wells.
“We are looking forward to keeping shareholders and investors updated with the strong pipeline of news flow that will be generated from this operated drilling activity and this will be complemented by additional milestones achieved from the Orion Project Joint Venture project.
“This is a very exciting time for the company and the team at Black Mesa Energy and we are looking forward to breaking ground on the Jewell Well location very shortly.”
Brookside’s position in the SWISH AOI (excluding the Flash 1-8-5MXH well and Courbet 1-27-22XHW well).
Sycamore and Woodford formations
Brookside will now move aggressively to begin operations on the Jewell Well, targeting one of two primary producing formations in the SWISH AOI, the Sycamore formation, which continues to deliver outstanding sustained productivity in nearby offsetting wells.
The Casillas Operating LLC operated Flash 1-8-5MXH well (around 3-miles west of the Jewell DSU) has produced ~500,000 barrels of oil equivalent in around 15-months, considerably higher than Brookside’s conservative estimate for the Jewell Well.
Future wells in the Jewell DSU will also target the Woodford formation, which also continues to deliver outstanding sustained productivity in nearby offsetting wells.
The Continental Resources operated Courbet 1-27-22XHW well (around 1-mile southwest of the Jewell DSU) has produced ~340,000 barrels of oil equivalent in around 12-months.
This production rate is considerably higher than BRK’s conservative estimate for the Jewell Well.