TIDMMSMN
RNS Number : 7027L
Mosman Oil and Gas Limited
14 January 2021
14 January 2021
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Six Monthly Production and Operations update
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration,
development and production company, announces its production
summary for the six months ended on 31 December 2020 and an
operations update.
Falcon-1 producing gas and condensate
The Falcon-1 well at the Champion project commenced commercial
production in December 2020. Falcon-1 is now producing
approximately 180 boepd (gross). Mosman's net production is 90
boepd (50% working interest) which is 68 boepd after royalties.
This is a significant well for Mosman, being both the highest
gross production well and the highest working interest well in
Mosman's portfolio. The net effect is that daily production rates
increase significantly, at this rate more than doubling net
production rates compared to the average daily rate for the six
months ended 31 December 2020.
Six Month Production Summary to 31 December 2020
During the period there was continued disruption from the
pandemic along with the requirement for certain workovers at
Stanley, but significantly the Falcon-1 well commenced
production.
Net Production attributable to Mosman for the six months was
8,650 boe.
Production Details
Further details are outlined below:
6 Months to 6 Months to 6 Months to 6 Months to
31 December 31 December 2020 30 June 30 June
2020 2020 2020
Total Project Net Attributable Total Project Net Attributable
============= ================= ============= ================
Gross boe Net boe Gross boe Net boe
============= ================= ============= ================
Falcon* - - - -
============= ================= ============= ================
Stanley 24,982 3,984 28,540 4,482
============= ================= ============= ================
Greater Stanley 926 185 485 97
============= ================= ============= ================
Arkoma*** - - 1,632 ** 276 **
============= ================= ============= ================
Welch**** 5,845 4,481 6,569 5,035
============= ================= ============= ================
Total boe 31,753 8,650 37,226 9,890
============= ================= ============= ================
Net production means net to Mosman's working interest before
royalties
* Falcon production started on 11 December, but will be reported
separately when known in detail
** Figures for five months of the period
*** awaiting production figures for Arkoma
**** Sale of project announced on 4 January 2021
Drilling opportunities
Mosman has an opportunity to participate in several potential
wells in 2021. The intention is to participate in drilling at least
one well each quarter.
The candidates for drilling include two wells at the Stanley
project (where four wells have already been drilled with a 100%
drilling success rate) and other wells in East Texas, including
wells at Cinnabar and the Galaxie well.
The exact order and timing of wells has not been finalised and
depends on the results of completion of the current round of
technical work . Drilling and workovers may be funded from existing
cash resources, proceeds of sale of assets, as well as other
funding alternatives.
The exercise of existing warrants may provide additional funds,
and there is also the potential to farmout interests in one or more
wells to third parties.
Cinnabar and Champion Projects
Mosman has a 97% working interest (reducing to 85% upon drilling
of the first well) in the Cinnabar lease and is now officially
recorded as the Operator of the Cinnabar lease.
At Cinnabar, a Third Party Independent Report (1) has identified
existing Proven plus Probable reserves of 849,000 barrels of
hydrocarbons. Technical work is underway to optimise a field
redevelopment of Cinnabar, including further 3D seismic evaluations
on Cinnabar to ensure that it is drilled most effectively. The
Company is targeting drilling two wells at Cinnabar during the
calendar year 2021 subject to funding and other matters. Two wells
drilled at Cinnabar in the 1980s are still producing. Flow rates
from both these wells were historically over 100 bopd and Mosman
anticipates that a similar production profile can be achieved from
future wells at Cinnabar.
The Champion project currently consists of two leases. Mosman
has a 50% interest in the Falcon lease, and a 60% working interest
in the Galaxie lease. The project area has multiple prospects
identified by 3D seismic that may be drilled in due course. The
largest prospect is Galaxie, and this is likely to be the next
prospect drilled. There is some preliminary work required to
determine the exact surface location based on existing roads and
pipelines, and to plan production infrastructure. The Company is
using the current flow rate from Falcon to indicate the potential
flow rates at Galaxie.
It is anticipated that a well will be drilled at either Cinnabar
or Galaxie in the second quarter of 2021. Each project differs in
attributes and costs, and further evaluation is required in order
to prioritise and proceed. For example, Cinnabar is predominantly
oil, whilst indications are that Galaxie is more likely to be
gas.
Stanley
Stanley-3 and Stanley-4 continue to produce oil.
The operator has recently advised that to increase flow rates, a
pump-jack has been installed at Stanley-2 and is now operational. A
second pump-jack has also been acquired for Stanley-1 and is
expected to be installed in the next two weeks.
Based on discussions with Mosman's JV partners, it is
anticipated that Stanley-5 will be drilled after Stanley-1 is back
on production. Subject to funding and other matters the Company is
also targeting a sixth well at Stanley towards the end of calendar
year 2021. Mosman anticipates that future wells at Stanley will
have a similar production profile to those already drilled.
Greater Stanley
The workover at Duff-1 was not able to remove the wellbore
obstruction required to recomplete in the target zone, and the well
was placed back on production. The joint venture now plans to
workover the other producing well in another target zone.
Sale of Welch and Arkoma
Mosman has signed a contract to sell Welch (announced on 4
January 2021) with settlement scheduled for 15 January 2021.
As announced, Mosman considers Arkoma to be a non-core asset and
it is held for sale.
John W Barr, Chairman of Mosman commented : "Mosman is well
positioned for strong production growth in 2021.
"We are particularly encouraged with the results from Falcon-1
and the cash-flow that will be derived from that well, as we plan
the 2021 year and beyond."
Technical Glossary
BBLs or bbls Barrels
BOPD or bopd barrels of oil per day
===============================================
BOEPD or boepd barrels of oil equivalent per day calculated
on the approximate 1:6 basis of the calorific
value of the hydrocarbons, (not based
on the price)
===============================================
MMCFPD or mmcfd Million cubic feet per day
MMBTU
Million British Thermal Units
===============================================
(1) This Reserves Report was prepared by a third party
independent petroleum engineering firm for Barry Lasker, a Managing
Partner at Baja, in June 2017 and conforms to SPE-PRMS petroleum
guidelines.
Qualified 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 Joint Broker
John W Barr, Executive Chairman SP Angel Corporate Finance LLP
Andy Carroll, Technical Director Stuart Gledhill / Richard Hail
jwbarr@mosmanoilandgas.com / Adam Cowl
acarroll@mosmanoilandgas.com +44 (0) 20 3470 0470
Alma PR Joint Broker
Justine James Monecor (London) Ltd trading as
+44 (0) 20 3405 0205 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
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