Success Of Acreage Acquisition And Re-valuation Model Confirmed By Maiden Oil And Gas Reserves

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On 6 December 2018, Brookside Energy Limited (ASX: BRK) announced the estimate of oil and gas reserves which the company holds at the world-class Anadarko Basin in Oklahoma.

There is a net oil and gas reserves at the Anadarko Basin of 3.45 MMboe which is equivalent to 20% holdings at Anadarko Basin holdings. The total reserves at Proved, Developed, producing (PDP) and Proved Undeveloped (PUD) reserves of the company is estimated to be 2.83 MMboe which is equivalent to 82% of the total reserves of the company. Under Probable reserve category, there was another 617 Mboe reserves.

The total net present value at a discount rate of 10% of the three reserves i.e. PDP, PUD and Probable is US$12.5 million. It is expected that it will generate a net revenue of US$37.75 million. The net present value at a discount rate of 10% per acre is equivalent to US$30,000. This indicates that the acquisition is highly successful and can be measured.  

The company continuously gave a negative performance in 10 years and five years of duration. In 5 years, the performance of the company is -99.80%. In 10 years, duration of the company, the performance of the company is -9.67%. Since last one year, the performance of the company is 7.69%.

For the half yearly period ended 30 June 2018, the company incurred a net loss of $359,012. The balance sheet of the company appears to be strong. The company holds a total asset of $11,827,077 and a total liability of $3,909,973 which indicates that the company is in a position to meet its long-term obligations. The company holds a total current asset of $4,742,770 and total current liabilities of $217,541 which is another proof that the company can maintain its short-term obligations. The total shareholder’s equity is worth $7,917,103.

The net cash outflow from the operating activities of the company was $565,618. Here, the main source of cash outflow was due to the payment made to suppliers and employees. Simultaneously, there was also a cash inflow in the form of interest.

The net cash outflow from the investing activities of the companies was $398,991. Here, the main source of cash outflow was due to the payment made for the exploring activities.

The net cash inflow from the financing activities of the company was $3,882,201. Here, the main source of cash outflow was due to the cost involved due to issue of share. Simultaneously, there were cash inflow as well as in the form of income generated from the issue of shares as well as revenue generated through borrowings.

By the end of FY2018, the net cash available with the company was $2,706,973. By the end of trading on 06 December 2018, the share price of BRK tumbled down by 7.143% which is equivalent to 0.001 points and traded at $0.013 which is near to 52 weeks low price with the stock holding a market capitalization of $13.93 million.


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