Brookside Energy [ASX:BRK]
Metals & Mining
Cash-Flow Positive, Net-Cash Oil Producer: One of the Most Under valued Energy Plays on the ASX
We initiate coverage of Brookside Energy (ASX: BRK) as a high-growth, liquids-rich U.S. onshore producer with a 12-month target of A$1.64 per share, reflecting ~256% upside from current levels. Brookside offers rare pure-play exposure to the Anadarko Basin – one of North America’s most productive and technically de-risked oil and gas provinces – where its operated wells continue to perform at or above forecast. Despite recent softness in crude prices, Brookside’s low breakeven, liquids-heavy mix, and accelerating operated production position it to deliver outsized cash flow as markets normalise. The company has successfully scaled from a prospecting and leasing and non-operated production strategy to a strongly executing operator with repeatable drilling success and disciplined reinvestment. A robust balance sheet, upcoming US listing, and active buy-back provide powerful catalysts for re-rating.
The Swish Play has been the main producing asset for Brookside, driving scale, cashflow and long-term value. Brookside’s near-term expansion is driven by its operated SWISH AOI, where the Sycamore and Woodford reservoirs continue to deliver strong liquids-rich performance and rapid paybacks. Operated production has grown from 1.1 Mboe/d to 1.8 Mboe/d (+70% YoY) in 3Q25, with cumulative output exceeding 3.27MMboe and liquids yields of ~55–60%. Additionally, the Bruins well – now delivering its first full quarter of production – is emerging as a notable cash-flow contributor, further validating SWISH’s productivity. Recent technical work has also identified two additional upside horizons within SWISH – the Caney Shale and Simpson Group sands – adding meaningful long-term inventory potential beyond the current development plan.
New Growth Engines in the Anadarko Basin
Brookside’s growth runway extends beyond SWISH through two emerging value centres, led by the Riverbend AOI – its next liquids-rich horizontal frontier. The area hosts laterally continuous reservoirs with strong analogue production (>7MMbbl oil and 11Bcf gas nearby), with an initial focus on securing an operated position in up to four 1,280-acre DSUs, underscoring Riverbend’s potential to evolve into a multi-DSU development hub or monetizable asset. The Bradbury AOI, currently on hold, remains a low-cost conventional opportunity within the Simpson Group. Complementing these operated options, the company’s non-operated STACK interests continue to provide stable PDP cash flow to support broader development plans.
Valuation range of A$1.56–1.72 per share
Using a blended valuation approach, applying equal weights to DCF and RV, we derive a valuation range of A$1.56–1.72 per share, reflecting Brookside’s improving operated well performance, expanding DSU inventory, and rising PDP/PUD reserves. While recent oil price weakness has temporarily weighed on drilling, Brookside’s liquids-rich production mix positions the company to benefit disproportionately from any recovery in WTI pricing. As operated development accelerates across SWISH and additional DSUs come online, we expect stronger cash flow visibility, higher reserve life, and a clearer path to full-field development. Notable risks to our investment thesis include commodity price risk and operational & well-performance risk.