Special report: Brookside’s interest in Contintental Resource’s new Gapstow Full Field Development to boost production and Reserves for FY25 and beyond and adds to its existing production guidance.
Brookside Energy (ASX:BRK) (OTC:RDFEF) is strategically tapping into the abundant oil and gas potential of the SWISH Area of Interest (AOI) in Oklahoma’s renowned Anadarko Basin.
Following hot on the heels of its recently sanctioned FMDP and SWISH AOI Full Field Development, expected to yield 4,500 barrels of oil equivalent by 2028, the company has just announced its participation in Continental Resources’ Gapstow Full Field Development (FFD), and boosting Brookside’s existing production outlook by another another 150 barrels of oil equivalent a day in 2025 and 2026.
Continental Resources has seen remarkable success with the Gapstow Well and the Courbet full field development program, and is now embarking on the comprehensive development of its acreage, which is just south of Brookside’s Bruins and Jewells Drilling Spacing Units (DSUs).
Continental Resources are hoping to reproduce its success at Courbet with a similar multi-well “wine-rack” approach to the Gapstow Full Field Development of the Sycamore Lime and Woodford Shale formations. This development method minimises cycle times and capex.
Brookside’s decision to participate as a non-operator in seven wells within the Gapstow FFD, with a cumulative working interest of 20.9% and a net cost of US$2.5 million, will see further growth in its production and Reserves, beyond its latest guidance given to the market in April.
This investment into Gapstow was already factored into the company’s 2024 capex budget and will be funded from working capital and cash flow.
The drilling phase is expected to start this quarter with completion expected in the December quarter of 2024. The Gapstow FFD project is projected to add approximately 150 barrels of oil equivalent per day (70% liquids) to Brookside’s production over the initial two years. This is consistent with its preference for crude and natural gas liquids output rather than ultra volatile Henry Hub gas and about in-line with its current production mix.
Gapstow will also provide a boost to Brookside’s Proven Developed Producing (PDP) reserve base, which currently sits at 11.6 MMBOE, although no Gapstow Reserves have been disclosed.
Continental’s existing Gapstow Well highlights the project’s potential, having already produced significant amounts of oil and gas — approximately 415,000 barrels of oil and close to 1 billion cubic feet of gas in just 11 months.
The focus of the Gapstow FFD program revolves around leveraging the extraordinarily productivity of the Gapstow Well.
Recognising Continental as a strong and efficient partner with a history of successful ventures in the Anadarko Basin, Brookside’s MD David Prentice sees this collaboration as a catalyst for growth.
“Continental is an excellent partner with a strong history for efficient and highly successful development of oil and gas reserves across the Anadarko Basin, including within the SWISH area, most notably the recent success with the Courbet full field development project, south of and adjacent to our FMDO project,” Prentice says.
“Participation in this venture with Continental, consistent with our liquids production focus, will grow our proven developed producing (PDP) reserve base and add important additional cashflow as we move into our operated SWISH AOI FFD in 2025.”
Gapstow marks the addition of yet another chapter to Brookside’s Anadarko Basin growth story. The company is in for a busy 2024 with the FMDP Project currently in execution, planning for the SWISH FFD set to commence in early 2025 and now the Gapstow FFD.
With abundance of cash, $32.7m at March 31, and existing cash flow, Brookside is extremely well capitalised to fund the more than tripling of production in the coming years.
This article was developed in collaboration with Brookside, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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