Watch the Brookside Energy Corporate Showcase

In this BPC Corporate Showcase Deep Dive, Brookside Energy Managing Director David Prentice joins Andrew Murphy to discuss the company’s transition from exploration to production, its operated position in the SWISH Play, the next phase of development at Sabres & Whalers, and the growth potential of the Riverbend area.

Brookside Energy Deep Dive - Transcript

In this extended deep-dive session of the Barclay Pierce Capital Corporate Showcase, host Andrew sits down with David Prentice, Managing Director of Brookside Energy (ASX: BRK). Ten years after founding the company, David explains how Brookside built a highly efficient, cash-flowing platform in Oklahoma's infrastructure-rich Anadarko Basin. They discuss the company's strong balance sheet, its upcoming American Depositary Receipt (ADR) listing, and the strategic expansion into the Riverbend project.

New to the Brookside story? Watch our Corporate Introduction Interview with David Prentice first.

Q: Brookside Energy has been on quite a journey in the Anadarko Basin. Can you take us back to the beginning and explain the core strategy behind the business?

David Prentice: It really has been an amazing journey. We started essentially from a standing start in the Anadarko Basin with a concept we built ourselves. Back when we founded the business in 2015 and 2016, we were specifically looking for reservoirs along the basin margin that could support excellent project economics—even if oil prices collapsed down to $40 or $50 a barrel.

In the ten years since founding the company, we have seen the ultimate highs and lows of the energy sector. Today, we find ourselves with nine highly successful wells in the ground. We have achieved four consecutive years of roughly $20 million in EBITDA. Every single dollar of that capital has been organically reinvested back into the business, establishing a fantastic operational platform to fuel our next phase of growth.

Crucially for your listeners, this is an exploitation story, not a high-risk exploration gamble. We know the oil and gas is exactly where we expect it to be. We developed a proprietary technical theory on how to most efficiently extract it from the ground, and we are successfully executing that plan.

Q: One major highlight for investors has to be the sheer strength of your balance sheet. You’ve achieved a return of capital to shareholders, you hold about $14.5 million in cash from the last quarterly report, and you have a clear credit facility. What are your options to scale development looking ahead?

David Prentice: We are currently sitting in a incredibly unique position that I describe as a "triple re-rating" opportunity. Those first nine wells acted as our reserve definition wells. The production data and operational experience gained from executing those projects efficiently have created a launchpad. We can now aggressively ramp up production and drilling into the right pricing environment. With recent macroeconomic events, our timing is looking perfect.

When you look at our re-rating opportunities, there are three clear pillars:

1. Macro Tailwinds: The current global energy environment is creating strong momentum.
2. Valuation Mismatch: There is a massive pricing disconnect between our US-listed peers and our current listing here in Australia, which we are actively working on a strategy to address.
3. Replicating Success: We are taking the exact first-principles "recipe" that gave us immense commercial success in our Swish area and applying it across the broader Anadarko Basin to build meaningful corporate scale.

Q: Historically, you have delivered some impressive operational metrics. What can you tell us about your recent production volumes and how you plan to carry that forward?

David Prentice: Because we built this business completely from scratch, we have gone from absolutely zero production to reaching peak rates of roughly 4,000 barrels of oil equivalent per day (BOE/d). Looking at our averages over a 12-month period, we averaged roughly 1,800 BOE/d for the entire year.

Those volumes are highly profitable because they are backed by low operating expenses (opex) and premium localized pricing for our physical product. That combination underwrites our positive cash flow and allows us to comfortably fund what comes next.

Q: Your recent well results have drawn significant attention, and you are starting to see a fresh wave of investment interest coming directly from the United States. What is driving that entry of US capital?

David Prentice: It comes down to two main factors. First, it is exceptionally rare for a small Australian E&P company to execute these massive horizontal wells so rapidly. We are maintaining a tight 90-day cycle time from "spud to cash"—meaning it takes just 90 days from the moment we start drilling a well to when we receive our first cash flow. This repeatable execution makes us stand out starkly from our small-cap peers in terms of managing risk.

Second, US investors who actively track drilling results in the Anadarko Basin were watching our data. Because all well results are public information in the US, savvy investors noticed our numbers, compared them to our neighbors, and realized our wells were performing as massive statistical outliers. They saw these incredible production rates and bought directly into our register.

That was the ultimate catalyst for us. We realized that if the deep capital markets of the US already understand our industry and are tracking our well results, we needed to build a direct beachhead to market to them.

Q: You have executed a structured development plan across four drilling space units (DSUs) in your Swish area of interest. What is the current status of your next major drilling campaign?

David Prentice: We are actively transitioning from "reserve definition drilling"—where we drill one isolated well at a time to map out the asset—into "pad development." We piloted this approach with our multi-well project, which served as our field blueprint for unlocking our 12.5 million barrels of oil equivalent (MMBOE) in proven reserves.

The next major campaign on the runway is our Sabers and Whalers project, which is getting underway immediately. We have already constructed the physical pad, built out the surface production facilities, and secured all regulatory approvals. We are simply waiting on the drilling rig to finish up its current well for one of our neighbors before it walks onto our site.

This is where the rubber meets the road. We are drilling two massive wells, and the incoming news flow for investors will be immense as we evaluate the reservoir, complete the wells, and initiate the commercial flowback.

Q: For people trying to understand the granular quality of the asset, how does the Swish play within the Anadarko Basin stack up against other global fields?

David Prentice: The southern portion of the Anadarko Basin possesses two massive natural advantages. First, the geological Sycamore and Woodford formations in our specific area are uniquely thick. The absolute sheer thickness and rock quality of the reservoir drive our rapid capital payback periods.

Second, we are sitting directly in the middle of a mature, historic oil field. The area is completely saturated with existing pipeline networks, refinery capacity, and natural gas processing facilities. We don't have to spend years building infrastructure; we simply tap right into the network. That is the secret behind our 90-day spud-to-cash timeline. We started with an overlooked concept, and today we are surrounded by some of the largest, most successful E&P companies in the United States because this is currently the hottest play in the basin.

Q: You are also scaling up your expansion asset, the Riverbend project. How is that area developing?

David Prentice: Riverbend is a massive growth initiative because it represents our evolution as a business. We are applying the exact same technical recipe that worked in Swish to an entirely new area along the basin margin.

We are currently in the early, highly lucrative leasing phase at Riverbend, aggressively accumulating our acreage position. Our goal is to finalize this land footprint and drill our very first reserve definition well at Riverbend before the end of the calendar year. Success there will give the market a clear, visible pathway for how we plan to add massive new reserves to our books. Our technical team on the ground in Oklahoma has a 100-year history of basin data to pull from, allowing us to pinpoint high-value pockets that the multi-billion-dollar majors simply overlook.

Q: You have major corporate news regarding a direct listing in the United States via an American Depositary Receipt (ADR). How will this listing structure benefit the company?

David Prentice: The genesis of the ADR listing came from my conversations with the North American institutional investors who bought into our Australian register. They told me plainly: "We are the pioneers who are comfortable buying on foreign exchanges, but there is an enormous wall of capital behind us that cannot buy international stocks. If you list a security directly in the US, it gives you the ultimate marketing beachhead."

As we have seen with other successful ASX companies—particularly in the critical minerals space—an ADR listing allows US institutions to get seamless exposure to our cash flow without crossing foreign exchange boundaries. We are currently finalizing our documentation to file with the SEC, which will unlock a massive, deep pool of capital.

Q: Small-cap oil and gas stocks in Australia are often under-followed. Can you quantify the exact valuation discount Brookside is trading at compared to your US peers?

David Prentice: We are currently sitting at the shallow end of a shallow capital market here in Australia, which has resulted in us trading at a staggering discount compared to companies doing the exact same thing in the US.

To look at the granular metrics:

• EV/EBITDA Multiple: Brookside trades at a raw 1.2x EV/EBITDA, whereas our exact US peer group trades between 4.5x to 5.0x.
• Value Per Flowing Barrel: We trade at roughly $10,000 to $11,000 per flowing barrel, while our US peers are valued in the mid-$30,000s—and likely higher given current oil prices.

We are trading at a deep discount across our reserves, our cash flow, and our production. The upcoming ADR listing gives us the exact tool we need to stand in front of American capital, expose this massive valuation gap, and actively close it.

Q: To wrap up, what is the near-term news pipeline that investors should look out for over the coming months?

David Prentice: We are entering a period of incredibly rich, continuous news flow that will run straight through the end of the year. Investors should keep a close eye on three immediate milestones:

1. The Sabers and Whalers Campaign: Spudding is just a couple of weeks away. Expect steady updates on drilling, well completion, flowback results, and initial production volumes.
2. Riverbend Land Strategy: Continued updates on our acreage accumulation leading up to our first reserve definition well target.
3. SEC Filing & ADR Launch: The formal filing of our SEC documents and the official execution of our US cross-listing.

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