Brookside Energy Limited: Second Quarter 2021 Activities and Cashflow Report

Perth, Western Australia – 30 July 2021 – Brookside Energy Limited (ASX: BRK) (Brookside or the Company) is pleased to provide the following summary of the Company’s activities during the second quarter of 2021.

Highlights

-          The Company successfully drilled the much-anticipated Jewell Well. Production casing was subsequently landed, set, and cemented in preparation for the commencement of completion operations. All work was completed on schedule, safely and without incident.

-          US major ExxonMobil, through its subsidiary XTO Energy Inc. (XTO) and Citation Oil and Gas Corp. (Citation), one of the largest private oil and gas companies in the United States, joined Brookside as working interest partners in the Jewell Well.

-          Works commenced on the surface production facilities, including the tank battery, oil and gas separators and gas line to a nearby sales line in preparation for Jewell Well completion operations and production.

-          Successfully closed on the acquisition of eleven producing wells and associated PDP reserves in the STACK play first announced in the first quarter 2021.

-          Anadarko Leasing Facility was repaid in full and retired after the end of the quarter. Company is now debt free, with a strong cash position and increasing revenues from oil and gas sales.

-          Listed on the Frankfurt Stock Exchange, supporting the Company’s strategy to broaden its overseas investor base at a time when global oil prices are rebounding, and the Company had reached a critical milestone with the commencement of drilling of the high-impact Jewell Well.

-          Sales receipts of ~A$606,000 for the quarter on net volumes of 12,410 BOE.

About Brookside Energy Limited

Brookside Energy Limited is an Australian public company listed on the Australian (ASX: BRK) and Frankfurt (8F3: FSE) stock exchanges. The Company was founded in 2015, to focus on the mid-continent region of the US, where our deep and valued relationships enable us to work with local communities to ensure sustainable growth and value creation through the safe and efficient development of energy assets. Focused on exploitation not exploration, the Company generates shareholder value through a disciplined portfolio approach to the acquisition and development of oil and gas assets and the leasing and development of acreage opportunities. The Company’s US subsidiary and manager of operations, Black Mesa, is an experienced mid-continent operator, which identifies opportunities and executes development for Brookside. Our business model effectively assigns risk and provides commercial incentives to maximize value for both parties.

Corporate and Financial Summary

Anadarko Basin Focussed

Anadarko Basin, Oklahoma

The Anadarko Basin is a geologic depositional and structural basin centred in the western part of Oklahoma that is oil and gas rich, and generally well explored (mature).  The basin is a proven tier-one oil and gas development province with significant existing oil and gas gathering and transportation infrastructure, a competitive and highly experienced oil and gas service sector, and a favourable regulatory environment. Recent activity (last six years) has been focussed primarily on two world-class oil and gas plays – STACK and SCOOP.  The STACK (Sooner Trend, Anadarko Basin, Canadian and Kingfisher Counties) and SCOOP (South Central Oklahoma Oil Province) Plays are being developed using modern horizontal drilling and completion techniques targeting the Mississippian aged formations (that sit above the Woodford Shale) and the Woodford Shale itself (the organic rich source rock for the hydrocarbons in the basin).  The SWISH AOI is an area of interest in the core of the SCOOP Play, identified and named by Brookside’s partner and manager of US operations, Black Mesa Energy (see Figure 1.)

Figure 1: Anadarko Basin, Oklahoma (STACK & SCOOP Plays)

1. Reported on a cash basis
2. Net production are volumes attributable to the Company’s Working Interest and are net of royalties

Brookside’s Three Pillars

During the quarter, the Company saw significant activity across each of its three pillars of Operated Drilling, Producing Properties Acquisitions and Land & Leasing. One of the most significant and exciting events during the quarter was the successful drilling of the game changing Jewell 13-12-1S-3W SXH1 well (Jewell Well) (see Figure 2).

The entire press release of the company can be found here: https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02401608-6A1043528?access_token=83ff96335c2d45a094df02a206a39ff4

Figure 2: SWISH activity map showing the location of Brookside DSUs

Drilling and Completion Activities

The Company has an interest in thirty-seven wells, targeting the productive formations of the Anadarko Basin (see Table 1).

Table 1: Company wells and working interest (WI) in the SCOOP and STACK Plays in the Anadarko Basin, Oklahoma

Note: Working Interest percentages may change subject to the issue of final pooling orders

Jewell 13-12-1S-3W SXH1 well

Brookside had a very busy quarter, successfully drilling and casing the Jewell Well in preparation for completion.

On 1 April Brookside announced that it had executed an IADC Drilling Bid Proposal and Daywork Drilling Contract with Oklahoma based Latshaw Drilling Company (Latshaw). This was followed by an announcement 14 April that the Jewell Well pad construction had been completed and the conductor set. Latshaw Rig 14 was mobilised to site on the week of 4 May with the Jewell Well spudded on 8 May (Figures 3 and 4).

By 9 June, barely one month since spud, the Jewell Well had reached TD (total measured depth) of ~14,100 feet, the production casing string was successfully landed, set and cemented in preparation for the commencement of completion operations and work on surface facilities had begun.

Surface production facilities include a 48” x 10’ horizontal three phase heated separator, a 6’ x 20’ vertical heater treater and a 30’’ x 10’ vertical separator. Tankage will consist of six, 400-barrel storage tanks. The tankage and process vessels will be situated in a steel containment dike in accordance with environmental regulations. Works also commenced on the construction of a ~2,700-foot, 6-inch gas line from the Jewell Well to a tie-in point on a nearby gas sales line.

Figure 3 – Latshaw Rig 14 (Image courtesy of Latshaw Drilling)       Figure 4 – Spudding of the Jewell Well

US Major to Participate in Jewell Acreage

On 29 June Brookside announced that US major ExxonMobil, through its subsidiary XTO Energy Inc., had elected to participate in the Jewell DSU by taking up its 4.5% Working Interest. Additionally, Citation Oil and Gas Corp., one of the largest private oil and gas companies in the United States, had also elected to take up its 2.3% Working Interest. A further 5.7% Working Interest was taken up by a combination of private equity and smaller private oil and gas firms.

Participation in the Jewell DSU includes an equivalent Working Interest in the high-impact Jewell 13-12-1S-3W SXH1 well (Jewell Well) plus the opportunity to participate in future wells drilled in this DSU.  Election to participate by these major companies was not only a significant vote of confidence in the quality of Brookside’s acreage in the southern SCOOP but also a very strong endorsement of Black Mesa as operator of the DSU and their technical and operational ability to recover the maximum oil and gas reserves in the most efficient manner possible.

The entire press release of the company can be found here: https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02401608-6A1043528?access_token=83ff96335c2d45a094df02a206a39ff4

Production and Cash Flow

Oil and gas production and sales continued during the quarter.  Net production (volumes attributable to the Company’s Working Interest and net of royalties) are summarised below.

Cash flows from operating activities for the quarter included receipts from sales of A$606,000 (note that receipts from sales are reported on a cash basis while the net revenues reported in the activities report are reported on an accrual basis based on volumes produced in the quarter).  Quarterly outflows related to production (LOE), staff costs and administration and corporate costs totalled A$689,000, this included approximately A$200,000 in non-recurring expenditure primarily related to the listing of the Company’s shares on the Frankfurt Stock Exchange and registry costs associated with the conversion of listed options.  Quarterly outflows for investing activities totalled A$2,545,000, this included expenses related to leasehold acquisitions and title opinions, JIB’s and drilling and completion expenses.

The Company also confirms that the amount disclosed in the Appendix 5B under Section 6, Payments to related parties of the entity and their associates, relates solely to payments made during the quarter of fees to members of the Board of Directors amounting to A$83,000.

- ENDS -

This announcement has been authorised for release by the Board of Directors of Brookside Energy Limited.

For further information contact:

Katherine Garvey

Company Secretary

Brookside Energy Limited

Tel: (+61 8) 6489 1600

[email protected]

FORWARD-LOOKING STATEMENTS AND OTHER DISCLAIMERS

This announcement may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions, which are outside the control of Brookside Energy Limited (“Brookside Energy” or “the Company”).  These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates.  Actual values, results or events may be materially different to those expressed or implied in this announcement. Given these uncertainties, readers are cautioned not to place reliance on forward-looking statements.  Any forward-looking statements in this announcement speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Brookside Energy does not undertake any obligation to update or revise any information or any of the forward-looking statements in this announcement or any changes in events, conditions or circumstances on which any such forward looking statement is based.

This announcement does not constitute investment advice.  Neither this announcement nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.   Shareholders should not rely on this announcement. This announcement does not consider any person's particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this announcement are not intended to represent recommendations of investments to persons. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

The information set out in this announcement does not purport to be all-inclusive or to contain all the information, which its recipients may require to make an informed assessment of Brookside Energy.  You should conduct your own investigations and perform your own analysis to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this announcement.

To the fullest extent permitted by law, the Company does not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this announcement. No responsibility for any errors or omissions from this announcement arising out of negligence or otherwise is accepted.

ABOUT BROOKSIDE ENERGY LIMITED

Brookside is an Australian public company listed on the Australian (ASX: BRK) and Frankfurt (8F3: FSE) stock exchanges. The Company was founded in 2015, to focus on the mid-continent region of the US, where our deep and valued relationships enable us to work with local communities to ensure sustainable growth and value creation through the safe and efficient development of energy assets. Focused on exploitation not exploration, the Company generates shareholder value through a disciplined portfolio approach to the acquisition and development of oil and gas assets and the leasing and development of acreage opportunities. The Company’s US subsidiary and manager of operations, Black Mesa, is an experienced mid-continent operator, which identifies opportunities and executes development for Brookside. Our business model effectively assigns risk and provides commercial incentives to maximize value for both parties.

Web http://www.brookside-energy.com.au

ABOUT BLACK MESA ENERGY LLC

Black Mesa, a Brookside controlled subsidiary, is an Oklahoma domiciled limited liability company established for the purpose of identifying and exploiting opportunities in the upstream oil and gas sector onshore in the United States.  Black Mesa was capitalised via an agreement between the Tulsa Equity Group, BRK Oklahoma (a wholly owned subsidiary of Brookside Energy Limited) and the Incentive Members of Black Mesa.  Black Mesa is executing a returns-based, disciplined strategy directed at the acquisition of producing properties, lower-risk development drilling opportunities and larger scale entry level acreage plays/concepts.  Black Mesa’s is leveraging the extensive experience of its executive team and its Board with the latest technology and data sets that are available to identify and evaluate opportunities.

Web http://www.blkmesa.com

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