Brookside Energy Ltd Accelerates Development of Flames Well and Secures Funding Track from CPS Capital

Flames is the latest in a trifecta of targeted wells in a production-owned drilling campaign at Anadarko, as Jewell and Rangers assets have been destroyed in recent months.

Brookside Energy Ltd (ASX:BRK) will ramp up a drilling campaign at its Flames oil and gas well in Oklahoma after recovering the same drill rig used to complete its Rangers asset in just 31 days.

Flames is the third well BRK will drill in the SWISH Prospect (AOI), which is part of the company’s core exploration portfolio in Oklahoma’s prolific Anadarko Basin.

The asset is also the latest well targeted under the company’s owned-by-production (HBP) program, which re-evaluated three drill-spacing units in Brookside’s Anadarko landholding.

Now, the energy stock is fully funded to complete the drilling program after signing a short-term financing and options underwriting agreement with CPS Capital Group.

The A$7.5 million funding track will help Brookside maintain operational momentum as it strives to unlock value in its large inventory of high-impact, low-risk development wells.

The highest prices for a decade

Speaking to the accelerated Flames program, Brookside general manager David Prentice said he was delighted to announce what he considered a major milestone.

“The opportunity to act quickly to secure the Kenai platform, fresh from its successful drilling at our Rangers well, means that we will now be in the enviable position of having completed our HBP drilling obligations before the end of the first half of 2022, effectively advancing cash flow from the Flames well and delivering this significant production (along with production from Rangers and Jewell Wells) at the highest oil and gas prices we’ve seen in nearly a decade,” he said.

“The production and revenues from these high-impact wells will not only accelerate our future development plans, but more importantly, their success will provide the catalyst for the reassessment of our core acreage position in SCOOP South.”

Higher actions

Shares were up to 29.45% higher intraday at A$0.022.

Drilling at Flames will target the Woodford Formation, a prolific producer in the SWISH prospect.

Brookside will again use the Kenai 18 drill rig to complete the program, hoping to replicate the success of its Rangers drilling campaign.

Notably, Brookside’s working interest in the Flames well is expected to double that of the Jewell well to over 80%, with the associated doubling of production and revenue share.

Free cash flow generated from wells in the HBP program will also allow Brookside to accelerate future development plans, with additional wells planned for the second half of 2022.

Funding will help Brookside achieve its goals

CPS Capital has agreed to underwrite some of Brookside’s quoted options – exercisable at AU$0.011 prior to June 30, 2022 – to place loan notes for an AU$7.5 million short-term funding facility.

Each loan note has a face value of AU$250,000 and will be worth AU$275,000 when it matures in July this year.

Under the subscription agreement, CPS has agreed to guarantee any shortfall in the exercise of the options up to A$9.25 million.

Commenting on today’s funding announcement, CPS Capital Managing Director Jason Peterson said, “We are excited about Brookside’s near-term prospects, and this structured loan facility and underwriting agreement secures that the company can act quickly to achieve its objectives in a very favorable context. pricing environment.

“The funds provided are non-dilutive, cheaper than a capital raise and provide certainty of the capital structure in the months ahead to attract potential new investors.

“We have listened to investors and believe this financing structure is what they are looking for.

“As Brookside’s largest group of shareholders (including myself personally), we look forward to a long and supportive association with the company, one we have proudly funded since Jewell Well’s development began in working closely with management and advising them along the way.”

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