TIDMMSMN
RNS Number : 8267Q
Mosman Oil and Gas Limited
15 September 2017
15 September 2017
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Operations Update and Completion of Welch acquisition
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration,
development and production company, announces an update on
Operations and the completion of the Welch Permian Basin Project
acquisition in Texas.
Strategy
Mosman's strategic objective continues to be that of identifying
opportunities which will provide operating cash flow and have
further development upside; in conjunction with adding value to the
Company's existing exploration permits.
Two acquisitions were completed in the last quarter and one in
the third quarter. Other potential acquisitions remain under
review; however the immediate focus is on the recently acquired
projects and existing exploration portfolio.
USA
Strawn (Texas): 50% interest and Operator
The Company's plan remains to re-invest free cash flow generated
at the project with a view to further increasing production with
further workovers. This work is ongoing.
Production for August 2017 was limited by water disposal to 160
bbls (gross), due to downtime of the main water injection pump.
This pump has been repaired and the wells can now produce
unconstrained. Cumulatively the Project is operating as expected
and delays are unavoidable from time to time.
Whilst there were no Sales in August, c.170 bbls have been sold
this week with two more similar shipment sizes expected to occur
shortly.
Welch Permian Basin Project (Texas): 100% interest and
Operator
Further to the announcement of 11 September 2017, the Company is
pleased to confirm that the Welch Permian Basin Asset acquisition
has now completed. Mosman's US operating subsidiary will soon take
over operations, and will immediately implement the strategy
outlined in the acquisition RNS.
Welch presents a good investment opportunity and meets Mosman's
strategic objectives. The daily average volume of oil sold for the
13 months to June 2017 was 34 bopd and there is good development
potential in respect to shorter term well workovers and medium term
horizontal drilling potential. (Note: as the daily production
records were not available, production figures are based on oil
sold).
In the near term, the plan is to critically manage lease
operating expenses and increase production to achieve positive cash
flow. Mosman has already identified existing shut in wells that
will be considered for workovers in the shorter term. This is a
similar strategy to the approach adopted at Strawn. The development
potential at Welch, such as horizontal wells, provides significant
potential upside.
Arkoma Stacked Pay Project (Oklahoma): 10% interest with options
over a further 45%
Mosman's immediate focus remains the technical work to estimate
the Resources and to make the next investment decision. Both
options to acquire further equity at the fixed price expire if the
first option is not exercised by 10 October 2017.
The 3D Seismic data received to date requires additional work
and thus progress in the last weeks has been slower than planned.
This will have an effect of the timing of the independent third
party Resource Report which has already been commissioned.
On-site, the Operator continues to bring wells on production and
these activities are being closely monitored. Production rates at
Arkoma have been variable while the Operator has been carrying out
work. In order to provide accurate results, Mosman will release
production data once this variability has abated.
The immediate focus remains completion of the technical work to
estimate the Resources in order to make the next investment
decision.
NEW ZEALAND
Murchison
Mosman has been advised by NZPAM that the Change of Condition
application was declined. This application was formally made on 28
December 2016 and it has taken over eight months to finally get a
decision.
Whilst waiting for the decision, Mosman has not progressed
further work at Murchison and NZPAM have now advised that Mosman is
now non-compliant with its formal Permit obligations. This can be
rectified by completing the exploration activities defined in the
Permit grant, which includes drilling 2 wells and the completion of
10km of seismic by March 2018 and Mosman will now recommence the
planning process in relation to the Permit while evaluating its
other options.
Mosman also continues to actively pursue a farm-out process on
the Permit.
Petroleum Creek
Planning continues for the three wells drilled to be plugged and
abandoned. It was expected that a suitable rig will be available in
the September quarter to complete the tasks. This now looks like
being deferred. Given the mobilisation costs from the North Island
it is planned to complete the task when the rig is in the South
island, thus sharing costs.
The freehold property at Petroleum Creek has now been listed for
sale, and that sale is expected to cover most of the abandonment
costs.
AUSTRALIA
Amadeus Basin Permits
Mosman owns and operates two granted permits (EP 145 & 156)
and one application (EPA 155).
The Northern Gas Pipeline ("NGP") that has commenced
construction, and from 2018 will provide access for Northern
Territory gas to markets in Eastern Australia, is progressing.
The field geologist report in relation to EP145 remains under
review; however the recent USA based
investments are being prioritised ahead of this work.
Competent Person's Statement
The information contained in this announcement has been reviewed
and approved by Andy
Carroll, Technical Director for Mosman, who has over 35 years of
relevant experience in the oil
industry. Mr. Carroll is a member of the Society of Petroleum
Engineers.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries:
Mosman Oil & Gas Limited NOMAD and Broker
John W Barr, Executive Chairman SP Angel Corporate Finance LLP
Andy Carroll, Technical Director Stuart Gledhill / Richard Hail
jwbarr@mosmanoilandgas.com +44 (0) 20 3470 0470
acarroll@mosmanoilandgas.com
Gable Communications Limited
Justine James / John Bick
+44 (0) 20 7193 7463
mosman@gablecommunications.com
Updates on the Company's activities are regularly posted on its
website:
www.mosmanoilandgas.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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