• Lower Oil Prices Overshadow Production Growth Potential: Since our previous report in May 2026, oil prices have declined 20% due to easing tensions in the Middle East, while consensus price forecasts are down 7% for 2026, and 4% for 2027. The S&P Oil & Gas Exploration & Production Index has declined 1% since our last report vs a 33% decline for BRK. We believe this disconnect overlooks BRK's significant near-term production growth potential, creating an attractive entry point.
  • Strong Growth Outlook: BRK is advancing its two-well drilling program, with both wells expected online in Q4. Based on prior results, initial production could reach 1,000–2,000 boepd per well. The company has achieved a 100% drilling success rate, with all nine existing wells successfully drilled on the first attempt.
  • Compelling Valuation: BRK trades at a 73% discount to peers (56% previously) across key metrics, including EV/Forward Revenue (0.42x vs. 2.38x), EV/Forward EBITDA (1.14x vs. 4.16x), EV/daily production ($15k vs. $40k), and EV/2P reserves (1.71x vs. 7.02x).
  • Multiple Near-Term Catalysts: Upcoming catalysts include the two-well program, and a potential NYSE American ADR listing, which could broaden the investor base, and improve liquidity.

Price and Volume (1-year)

  YTD 12M
BRK -21% -5%
ASX 6% 4%
Sector* 38% 46%

* Brookside Energy has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in A$ except commodity prices, which are in US$.

Portfolio Overview

BRK’s portfolio is in the Anadarko Basin, a mature basin revitalized by horizontal drilling and fracking

Key Targets in the Anadarko Basin, Oklahoma

Horizontal drilling and fracking have significantly increased production, improved recovery rates, and unlocked previously uneconomic shale resources
Per the American Association of Petroleum Geologists, the basin is estimated to host tens of billions of boe in recoverable resources, supporting decades of future drilling potential

Source: Company

BRK operates nine producing wells (PDP), and 19 proved undeveloped locations (PUDs/planned for future development), across 5,000+ acres

BRK has a 100% success rate, with all nine wells successfully drilled on the first attempt

Reserves & Expansion Potential 

Produced 3.93 mmboe since 2021

12.52 mmboe of reserves (December 2025), including 2.80 mmboe from nine producing wells, and 19 future drilling locations

Existing wells have an expected productive life of ~20 years
Q2 production: ↓ 6% QoQ to 1,404 boepd, in line with our estimate, due to no new wells and natural declines

Production Data and Key Metrics

Revenue: ↑ 24% QoQ (4% below our estimate), driven by higher oil prices, partly offset by lower volumes
Operating cash flow: ↓ 73% QoQ, not a concern, as it reflects timing differences between customer receipts and royalty/G&A payments. We expect a strong Q3 rebound as Q2 sales are collected

Source: FRC / Company

Ended Q2 with $15M in cash (flat QoQ) and an undrawn $35M credit facility, providing $50M in available liquidity

Near-Term Plans & Catalysts

  • BRK is advancing the first two of 19 proved undeveloped drilling locations from its December 2025 reserve report. Net CAPEX is estimated at ~$18M (unchanged), funded through operating cash flow, with unused credit capacity available if needed. Both wells are targeted for Q4 production.
Two new wells under development

Oil Price Outlook

Source: FRC / GLJ / Sproule

Since our last report, consensus oil price forecasts are down 7% for 2026, and 4% for 2027 

FRC Projections and Valuation 

Source: FRC

We lowered our 2026, and 2027, revenue, and EPS estimates on weaker oil price forecasts, while leaving our long-term outlook largely unchanged

As a result, our DCF valuation declined from $2.09 to $2.01/share 

Source: FRC

BRK vs Junior Oil and Gas Producers

Source: FRC / S&P Capital IQ

Sector multiples are down 6% since our last report
BRK trades at an average discount of 73% (previously 56%) to comparables 
Applying sector multiples, we arrive at a comparable valuation of $1.06/share (previously $1.17/share), driven by lower sector multiples, and our lower revenue and EBITDA estimates

We reiterate our BUY rating, and adjust our fair value estimate from $1.62 to $1.54/share  (the average of our DCF and comparables valuations). The upcoming two-well program could materially boost production in Q4, with further upside from a potential NYSE listing. At current valuations, we believe BRK’s growth potential remains underappreciated, presenting an attractive entry point.

Risks

We believe the company is exposed to the following key risks (not exhaustive):

  • Production and projections are highly dependent on oil prices
  • Oil prices are volatile , and influenced by macroeconomic and geopolitical factors
  • Exploration and drilling success is uncertain
  • High upfront costs associated with drilling and completing new wells
  • Regulatory, environmental, and permitting requirements may affect operations
  • Access to financing may be sensitive to commodity price cycles

We are maintainingour risk rating of 3 (Average)

APPENDIX