Hi mate
It's not a dumb question at all.
Yes, the stacked graph is the 3 stream production NET to BRK per month.
Note, the graph only displays the operated DSU SWISH production and excludes current Stack, Orion and upcoming Gapstow production.
For me , it's probably the most significant graph in terms of what BRK is doing at SWISH , how and when its going to get there .
So much can be gleaned from this graph.
View attachment 61771111) The effect of the cut in current production from July 2024 to Feb-march 2025 . This will be the shut in of the Flames well during the FMDP completion and flowback period.
2) Despite the steep decline post flowback, we see BRK will increase by ~300% to peak production over 4 years from 2024 , an annualised COMPOUND growth rate of ~25%
3)We see the decline curve flatten significantly post Jan 2030 from ~80,000 BOE net t0 BRK ( more than double current production) and take 3 years to fall to current production by Jan 2033.
4) At a flat price if US$75 for oil, and US$2.5 for gas, as quoted from page 11 , the SWISH FFD is " Forecast to generate cumulative revenue of US$384 million and cumulative net income of US$169 million to the end of FY2028"
Why is this significant?
This means by the time the last DSU starts to produce in Sept 2028, (assuming oil and gas prices go no where from where they are in May 2024), BRK will have generated free cash of ~US$40 million after paying US$126 million in field development costs... but more importantly, as all SWISH capital costs will have been recovered, the project is unencumbered by any further capital costs ( apart from pumps installed to maintain flows and an occasional workover).
At the start of this no SWISH capital expense phase, the project will be producing over 180,000 BOE per month. At US$ 30 net back to BRK, this will be cash generation of US$5.4 million (AUD4 7.7 million at 0.7 currency) for that month.
One year later the project is still producing 90,000 BOE per month, or US$2.7.... put whatever netback figure you want, ie between US$ 25-40 to see what the free cash generation can be from the project for any particular month.
( US$ 40 net back will require a BOE price of US51-53 made of oil at US$80, NGl at US$35 and gas atUS$4.5 per mcf at the 40:30:30 ratio )
This graph is an illustration of the tremendous free cash generative capacity of the SWISH FFD, even after post flush significant decline leads to the flatter , long tail production.
Indeed , BRK guide production of 4.2 MMBOE net over the 5 years from May 2028, which at US$ 30 per BOE is cumulative free cash generation of ~US$126 million, and still going strong at ~US$1.2 million per month in 2033.
Yes, the culmination of the SWISH FFD a few years away, but during the intervening period, BRK will also be using the cash to acquire, generate other projects , lease positions, that will be added to the above chart to boost production even more post the SWISH.
This is where the team will need to focus it's efforts while they complete the FFD, and Gapstow is a prime, early example.
Cheers
Dan
(20min delay)
