114,000 BOE: Brookside reports lower output and A$5.90 million cash

Suttles wells begin early sales

Brookside Energy Limited (ASX:BRK) has reached the operational handover point for its two-well Suttles development, with Sabres and Whalers commencing sales during early flowback in October. The wells were drilled and cased during the September quarter, then taken through a 64-stage stimulation program shortly after quarter end. Brookside holds an approximately 70% working interest in each well.

The milestone follows the placeholder and comes with an important qualification: clean-up operations were still continuing as completion fluids were recovered, and Brookside said representative initial production rates would be reported only once sufficient production data became available. The company’s nine existing operated SWISH wells continued to provide the production base while the new wells moved through completion.

Production and realised prices weaken

“Net production figures are volumes attributable to the Company’s Working Interest and are net of royalties.”

Group net production fell 10.8% to 114,000 BOE in the September quarter, from 127,732 BOE in June. Brookside attributed the decline to natural production decline and temporary downtime, including precautionary shut-ins during nearby third-party hydraulic fracturing and a compressor outage affecting Flames.

The quarter was also pressured by weaker pricing. Net sales volumes fell 6.8% to 116,143 BOE, while the blended realised price dropped 21.2% to US$33.64 per BOE. Brookside said realised gas prices fell about 40% and oil prices about 8%, with the resulting combination of lower prices and volumes reducing revenue attributable to sales to US$3.91 million from US$5.32 million.

Lone Star adds production as investment accelerates

Brookside completed its US$1.114 million Lone Star acquisition on 2 September, buying operated and non-operated oil and gas interests funded from existing working capital. The portfolio produced about 11,099 BOE in the June quarter, equivalent to approximately 123 BOE per day, and includes Proved Developed Producing reserves. The stated purchase price equates to roughly US$9,100 per flowing BOE per day.

Cash receipts from customers declined to A$8.33 million, but net operating cash flow more than doubled to A$2.03 million as payments to working-interest owners, royalty holders, staff and administration costs fell during the period. That improvement did not offset the development spend: gross investing payments reached A$10.90 million, including A$8.4 million for Suttles and A$1.55 million for Lone Star. After working-interest partner contributions, net investing outflows were A$10.28 million.

Liquidity remains tied to well performance

Brookside ended September with A$5.90 million in cash, down from A$14.52 million three months earlier, while its US$25 million credit facility remained undrawn. The quarterly cash-flow report lists total available financing facilities of A$35.83 million, although the facility’s initial borrowing base is US$8.5 million and subject to semi-annual redeterminations.

The company is also carrying further commitments beyond the operated Suttles wells. It has announced interests in five proposed non-operated horizontal wells across the Southern SCOOP, Northern SCOOP and Cherokee areas, with estimated working interests of about 1% to 12% and indicative total development commitments of approximately US$3.5 million. These opportunities sit alongside ongoing leasing and technical work at Riverbend and the five proposed Oklahoma wells previously described as an expansion beyond Brookside’s operated SWISH program.

Commodity exposure remains material. At quarter end, oil hedges covered about 30% of forecast December-quarter oil sales, while gas hedges covered about 45% of forecast gas sales. Brookside said its 2027 hedge book currently covered approximately 75,000 BOE, with scope to increase coverage where forward prices exceed its planning assumptions.