Brookside Energy Ltd (ASX:BRK, OTC:RDFEF) has outlined a growth and value creation path for 2025 along which it aims to build on the many successes achieved in 2024 by accumulating further oil and gas inventory in Oklahoma’s prolific Anadarko Basin.
Rather than moving directly into full field development, the company intends to build inventory by identifying and acquiring further high-quality drilling locations within the Anadarko Basin and conducting a targeted drilling program.
This decision has been taken due to a softening in oil prices in recent months as the Brookside brought its FMDP wells online with the company expecting that price volatility may persist into at least the first half of 2025.
Committed to growth
Brookside’s managing director David Prentice said: “The strategic initiatives we have outlined for 2025 reflect our ongoing commitment to disciplined growth and value creation.
"By prioritizing the expansion of our high-quality drilling inventory and executing a targeted drilling program in the SWISH Play, we are positioning ourselves to capitalize on the opportunities within the Anadarko Basin.”
To expand inventory
Efforts are underway to expand the company’s inventory of low-cost, high-margin undeveloped drilling locations in the SWISH Play and the broader Anadarko Basin.
Early progress includes work to add a fifth Drilling Spacing Unit (DSU) within the SWISH Play area.
This expansion strengthens Brookside's ability to replace proved developed reserves and increase its drilling inventory beyond the current four-year plan, a critical step toward sustainable growth.
The team has identified several opportunities to achieve this and will continue to leverage its expertise, experience and the significant volume of geological, geophysical, land and reservoir data accumulated in the basin to unlock additional value in underdeveloped areas.
Remaining flexible
"Our focus on maintaining a robust balance sheet, aligned with our capital allocation strategy, ensures we can pursue these opportunities responsibly while remaining flexible to market conditions,” Prentice said.
"With strong production growth anticipated and additional inventory developments already underway, we are confident in our ability to deliver sustainable returns for our shareholders.”
Brookside’s strategic focus and growth initiatives for 2025 include three new 10,000-foot lateral horizontal wells with the first set to spud in the first quarter.
Pre-spud work such as pad selection, surface agreements and other regulatory work, is already underway.
The remaining two wells, planned for the third quarter, will target a new DSU with further details to be shared following completion of the regulatory process.
Outlook for 2025
Supporting the company’s strategy into the future will be growing production from the SWISH Play.
Net production in 2025 is expected to double compared to pre-FMDP levels and grow by 30% to 40% above the 2024 annual average, driven by the success of the FMDP development and contributions from the 2025 drilling program, particularly in the second half of 2025.
Projected net capital expenditure (capex) for 2025 is US$18.3 million (A$28.7 million), encompassing drilling, completion and land costs related to spacing and pooling.
Additionally, a portion of the 2025 budget is allocated to prospecting, acreage identification and acquisition activities.
EBITDA for 2025 is projected at US$18 million (A$28 million), based on pricing of WTI crude oil at US$75.00 per barrel and natural gas at US$2.50 per thousand cubic feet.
This aligns with previous forecasts after accounting for revisions to the 2025 drilling program.
Capital allocation
The company's capital allocation strategy prioritizes maintaining a capex budget aligned with cash flow to ensure financial flexibility.
The 2025 budget for capex, inventory expansion and G&A expenses will be funded through cash flow and working capital.
Brookside remains focused on allocating capital strategically to projects that drive long-term growth while preserving the strength of its balance sheet.
Investor webinar
Brookside will host a webinar for investors and shareholders on a date to be set early in the new year to present an updated five-year plan that incorporates the 2025 drilling and inventory growth initiatives along with an updated full-field development outlook.
Further details will be provided in due course.