Mosman Oil and Gas Limited Arkoma Stacked Pay Project Update (5205S)
03 October 2017 - 6:10PM
UK Regulatory
TIDMMSMN
RNS Number : 5205S
Mosman Oil and Gas Limited
03 October 2017
3 October 2017
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Arkoma Stacked Pay Project Update
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration,
development and production company, is pleased to provide an update
in respect to the Arkoma Stacked Pay Project (the "Project") in
Oklahoma, USA.
As per in the Company's announcement of 23 May 2017, Mosman
currently owns 10% of the Project and holds two options to increase
its interest to 55%:
1. A first option to acquire a further 20% of the Inland Assets
for USD$1 million expiring on 10 October 2017 (the "First
Option");
2. Subject to the First Option being exercised, a second option
to acquire a further 25% of the Inland Assets for USD$425,000 in
March 2018 (the "Second Option").
Mosman's strategic alliance partner Blackstone Oil and Gas
Limited has an option over 45% of the Project.
Agreement to Additional Work and Extension of First Option
Mosman and Inland Operating Company have agreed to amend the
agreement in order to conduct additional work and to extend the
First Option from 10 October 2017 to 15 November 2017. This will
allow the recent encouraging results from the Cromwell zone and a
test of the Union Valley zone to be included in the Reserve Report
prior to a decision in November.
At Arkoma, production of oil and gas continues from the Wilcox
sands and the Viola Limestone zones. This information, together
with mapping of the zones based on the 3D Seismic survey, is
sufficient for Reserves to be estimated by the independent expert,
Moyes and Co, and this work is ongoing and expected to be completed
early in November.
The flow test on the Woodford zone established hydrocarbons
(including oil) and permeability due to natural fractures. The
Woodford zone has potential for development as an unconventional
shale resource as demonstrated by other operators in Oklahoma, such
as Devon Energy Corp., and Calyx Energy LLC who are operating a few
miles to the south of Arkoma.
In addition, the Cromwell zone was recently completed in the
Wise 3-25 well and commenced flowing on 24 September 2017. Initial
flow is oil and gas. This well is being brought onstream by
steadily increasing choke size and hence flow rates. While
additional time is required to determine the stable rates of oil
and gas from this zone, initial results provide important evidence
that the Arkoma project has "stacked pay". The development plan for
stacked pay allows the most economic zones to be produced first,
such as the shallower oil and gas zones that do not require
expensive high volume pumps and related water disposal.
Also discussed at the site visit by Andy Carroll last week was
an enhanced work program and it was agreed with Inland Operating
Company that a well should be completed in the Union Valley zone,
so that this zone may also be included in the Reserves Report. The
Union Valley zone is just above the Cromwell zone. Mosman will pay
for this additional work at a cost of up to USD$50,000.
This short but essential extension will allow:
-- recompletion and flow test of one well in the Union Valley zone;
-- stabilisation of the Cromwell zone flow rates;
-- ongoing optimisation of the Wilcox and Viola production;
-- integration of these results in the Moyes and Co Resource Report: and
-- Board review of the results prior to a final a decision to proceed.
John W. Barr, Executive Chairman, said: "The strong flows from
the new zone are encouraging and we look forward to reviewing the
Reserves Report ahead of making a decision in November."
*a map highlighting the Wilcox Sands, Viola Limestone, Cromwell
and Union Valley Zones can be found at www.mosmanoilandgas.com
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 SP Angel Corporate Finance
Chairman LLP
Andy Carroll, Technical Stuart Gledhill / Richard
Director 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
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