TIDMMSMN
RNS Number : 9323Q
Mosman Oil and Gas Limited
24 June 2020
24 June 2020
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Corporate and Operations Update
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration,
development and production company, provides an update to current
and planned operations.
Global Events and Corporate Review
As previously stated, Mosman's business is not immune to the
recent exceptional external events including Covid-19 and the
fluctuating oil price. Production, however, continues with a
current emphasis on margins and cashflow, rather than maximising
volumes at this point in time.
Growth opportunities including Stanley and Greater Stanley in
Texas have been prioritised and all activities are being operated
on the basis of minimising both operating and capital costs.
With the WTI oil price having recovered and currently around USD
40 per barrel, Mosman's operations are underpinned by low operating
and development costs and the Board is now considering how best to
grow the business over the next year given the improved oil price
backdrop.
Business Plan
Mosman continues to pursue its Refocussed Corporate Strategy
detailed in the Company's announcement of 14 February 2020, which
includes growth in core areas with potential for a near term
increased production and the farmout or sale of other assets.
In furtherance of this strategy and as previously announced,
Mosman has contracted to sell its Welch Project in Texas for USD
300,000 and has received a USD 60,000 non-refundable deposit.
Completion is due in early July 2020.
Mosman also farmed out EPA 155 in NT, Australia, and has
received the first payment of AUD 15,000.
In line with its strategy, the Company continues to pursue the
sale of its other non-core assets while evaluating opportunities
which fit its strategy and growth criteria.
Production Operations
Ahead of its six monthly production update for the period to 30
June 2020, Mosman provides the following update in respect of its
principal projects and operations.
1. At Stanley the Operator's focus has been on minimising
operational costs while oil prices were low. Stanley continues to
produce positive cashflow at the operating level, and oil
inventories and sales are being carefully managed including through
the use of onsite storage tanks, as previously advised. The
Operator at Stanley has advised that , in its opinion , recent
operational improvements including to the central processing
facilities and reworking and upgrading the salt-water disposal
system , have materially lowered Stanley's operating costs with the
resultant low cost structure allowing Stanley to operate profitably
with oil prices at the mid-teens .
Stanley-1 has been shut-in for several weeks pending
recompletion of the well. An AFE for this workover has recently
been issued, approved and paid for by Mosman. This temporary
shut-in at Stanley-1 has resulted in a reduction in daily
production until the well is back on production. The future
production rate depends on the results of the Stanley-1
re-completion.
Mosman anticipates that once the Operator has completed the
workover at Stanley-1 (expected July 2020), its attention will turn
to drilling the proposed Stanley-4 well. With reduced drilling
activity, more rigs are available, and this is expected to result
in lower drilling costs.
2. At Greater Stanley, the plan remains to increase production
by workovers on one of the the existing producing wells in the Duff
lease. Based on experience in the adjacent Stanley lease, there may
be potential to produce at higher rates from zones not yet produced
in this lease. This workover is now planned and as soon approvals
are obtained it should proceed with this currently expected to
occur in July 2020.
3. At the Arkoma project in Oklahoma which has been identified
as non-core, production operations continue. Mosman is awaiting
full production information from the Operator. Mosman has not
contributed any additional cash funding to the Arkoma project this
year and does not anticipate the need to do so.
4. At the Welch Project, no equipment breakdowns or new
workovers occurred during May, resulting in steady production.
Daily average production for the six month period ending 30 June
2020 is expected to be broadly similar to the daily average for the
6 month period ended 31 December 2019. Mosman will receive all
production at Welch up until the date the sale is concluded,
including the oil inventory at that time.
5. In NT, Australia, ground operations are delayed due to the
Covid-19 pandemic.
Whilst cost control and margins have been the main focus in
recent months, future shorter term production rates will depend on
the results of the already planned recompletions at Stanley-1 and
at Greater Stanley in the Duff lease. Mosman also looks forward to
the Operator at Stanley progressing renewed plans for the drilling
at Stanley-4.
One of the additional growth opportunities being considered is
drilling the Falcon well. Whilst oil and gas prices are lower than
last year, rig costs are also lower, and the Falcon well has
significant oil and gas potential. Any success would enhance the
prospectively of similar targets in this lease, and the adjacent
lease that includes the Galaxie well.
The drilling of a well at Falcon is currently subject to an
ongoing in-house review, and any activity will be subject to
funding.
Other Matters
The Legal action Mosman had instigated with the aim to recover
funds from Blackstone Oil and Gas Inc remains ongoing but has been
delayed by the Covid-19 pandemic.
Mosman owns shares in Norseman Capital Limited, which has
recently announced a transaction in Canada. This should facilitate
Norseman's shares moving to trading on the TSXV exchange. The
Mosman Board considers these shares as an asset for sale and is
reviewing the sale of the Norseman shares in an orderly manner. As
part of that process Mosman's Chairman has recused himself from the
sale process, as he is a Director and shareholder, of both
companies.
John W Barr, Chairman of Mosman commented : "The Mosman Board
acted quickly and decisively in March in order to manage costs. We
are pleased to be able to move from a position of tight cashflow
control to the careful consideration of growth options. We are now
evaluating potential opportunities which include being involved in
two workovers and one or two new wells in the coming months."
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
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 Joint Broker
John W Barr, Executive Chairman SP Angel Corporate Finance LLP
Andy Carroll, Technical Director Stuart Gledhill / Richard Hail
jwbarr@mosmanoilandgas.com / Soltan Tagiev
acarroll@mosmanoilandgas.com +44 (0) 20 3470 0470
Alma PR Joint Broker
Justine James Monecor (London) Ltd
+44 (0) 20 3405 0205 trading as ETX Capital
+44 (0) 7525 324431 Thomas Smith
mosman@almapr.co.uk +44 (0) 20 7392 1432
Updates on the Company's activities are regularly posted on its
website: www.mosmanoilandgas.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDGZGZVRDNGGZG
(END) Dow Jones Newswires
June 24, 2020 04:09 ET (08:09 GMT)
Mosman Oil And Gas (LSE:MSMN)
Historical Stock Chart
From Apr 2024 to May 2024
Mosman Oil And Gas (LSE:MSMN)
Historical Stock Chart
From May 2023 to May 2024