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Mosman Oil and Gas #MSMN – Production Update – 43% increase in six month net production
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces its production summary for the six months ended 31 December 2021.
Net Production attributable to Mosman for the six months was 17,344 boe, an increase of 5,201 boe, or 43% increase compared to the six months to June 2021 of 12,143 boe. This is despite the operational issues experienced in December that reduced the production in the 3 months to 31 December. This progress reflects the uplift in production from growth of existing projects, the acquisition of Nadsoilco and an increased interest in Falcon. It does not reflect recent increases in production at Falcon which occurred after 31 December 2021, and does not include the Winters-2 well which was drilled in November and was recently recompleted and flowed gas. It also only includes minor production from Stanley-5.
Production Summary
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3 Months to 31 December 2021 |
6 Months to 31 December 2021 |
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boe |
boe |
||||
|
|
Gross Project Production |
Net Production to Mosman |
Gross Project Production |
Net Production to Mosman |
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|
|
|
|
|
|
|
|
|
|
|
Gross boe |
Net boe |
Gross boe |
Net boe |
|
|
|
Falcon |
5,944 |
4,458 |
14,800 |
11,099 |
|
|
|
Stanley |
5,130 |
1,741 |
11,705 |
4,141 |
|
|
|
Livingston |
172 |
35 |
501 |
100 |
|
|
|
Winters |
173 |
50 |
349 |
101 |
|
|
|
Greater Stanley |
– |
– |
– |
– |
|
|
|
Arkoma |
3,362 |
839 |
7,617 |
1,903 |
|
|
|
|
|
|
|
|
|
|
|
Welch (sold) |
|
|
|
|
|
|
|
Total boe |
14,781 |
7,123 |
34,972 |
17,344 |
|
|
Production numbers are based on the current best available data and are subject to adjustment upon receipt of final sales invoices from the purchasers of products.
Falcon
There was natural decline in production from the producing zone in October and November that meant it was time to add an additional production zone. The well was shut in to perform the workover.
The well was successfully perforated in December. Production in December was constrained as production facilities were upgraded.
Mosman reported on 17 January 2021 that production was 113 gross boepd with a 7/64 choke
Since adjusting the choke to 8/64 seven days ago, the well has averaged 133 gross boepd, a 64% increase compared to the average gross production for the six months ended 31 December 2021.
Stanley
On the Stanley project, production has been constrained mainly because Stanley-4 is waiting on gas infrastructure to be completed before it can be returned to production. This infrastructure is a combination of existing pipelines controlled by Nadsoilco, new pipelines and connections requiring multiple land access agreements and regulatory approvals. The infrastructure will have significant short term and long term benefits to the Stanley area.
Stanley-5 was drilled and been producing at an average daily rate circa 50 bopd since coming on production in December 2021.
Stanley-3 continues to produce steady oil rates, but the gravel pack on Stanley-1 was not successful and the well will be worked over again. Stanley-2 production has declined and this well is a candidate for recompletion.
Livingston
The Livingston property was one part of the acquisition of Nadsoilco. One well (Davis & Holmes 11) that has been shut-in for over one year was successfully worked over and put on production in December. Nadsoilco owns 20% of the well.
Production has been circa 10 to 20 bopd (gross) with some water, whilst production facilities are being modified to optimize the production rate.
Greater Stanley
The workover of a Duff lease well was carried out. The recompletion was unsuccessful, and the production strategy on this lease is now under review.
Winters
Winters-2 has been recompleted in the Wilcox sand 6,695-6,700 feet and flowed gas. Flow tests are expected to be conducted later this week and will be reported in due course. Gas infrastructure is being installed to enable gas sales from the Winters and Stanley leases.
Arkoma
Production had been steady until there was minor damage from a lightning strike in December 2021 which is now repaired. Two wells are shut-in awaiting workovers. This asset is being held for sale as other projects are preferred for further investment.
Cinnabar
3D seismic data was successfully reprocessed and interpreted, indicating several potential drilling locations. Mosman will seek to farmout at least one well at the annual NAPE Summit 2022 in Houston in February.
John W Barr, Chairman, said: “Mosman is pleased to report an uplift in production from the previous half year which reflects a daily production rate of 95 boepd for the six months to 31 December 2021.
“Importantly, since 31 December we are seeing growth in production which has been achieved with the recompletion at Falcon, the drilling and start of production at Stanley-5 and the workover of -D&H-11. We anticipate further increases from workovers at Stanley, Stanley-4 returning to production and Winters-2 starting production once gas infrastructure is completed.”
Quarterly Updates
Going forward Mosman will move to quarterly production updates.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (‘MAR’) which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (‘RIS’), this inside is now considered to be in the public domain.
Glossary:
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boe
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Barrels of oil equivalent based on calorific value as opposed to dollar value |
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boepd |
Barrels of oil per day of oil equivalent based on calorific value as opposed to dollar value |
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Gross Project Production |
Means the production of BOE at a total project level (100% basis) before royalties (where Mosman is the Operator) and where Mosman is not the operator the total gross production for the project |
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Net Production |
Net to Mosman’s Working interest attributable production means net to Mosman’s working interest before royalties |
Enquiries:
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Mosman Oil & Gas Limited John W Barr, Executive Chairman Andy Carroll, Technical Director |
NOMAD and Joint Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Adam Cowl +44 (0) 20 3470 0470 |
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Alma PR Justine James / Joe Pederzolli +44 (0) 20 3405 0205 +44 (0) 7525 324431 |
Joint Broker Monecor (London) Ltd trading as ETX Capital Thomas Smith 020 7392 1432 |
Updates on the Company’s activities are regularly posted on its website:
Notes to editors
Mosman (AIM:MSMN) is an oil exploration, development, and production company with projects in the US and Australia.
Mosman’s strategic objectives remain consistent: to identify opportunities which will provide operating cash flow and have development upside, in conjunction with progressing exploration of existing exploration permits.
The Company has seven projects in the US: Stanley, Greater Stanley, Livingston, Winters, Challenger and Champion in East Texas and Arkoma in Oklahoma in addition to exploration projects in the Amadeus Basin in Central Australia.
Mosman Oil & Gas #MSMN – Updated Six Monthly Production
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development, and production company, announces an updated production summary for the six months ended 31 December 2020, following receipt of additional production data on its Falcon and Arkoma projects in the USA.
The original report, announced on 14 January 2021, was based on data available at that time from the operators of each project. Net Production attributable to Mosman for the six months now stands at 9,871 boe (compared to 8,650 boe as previously announced).
Production Details
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6 Months to 31 December 2020
UPDATED |
6 Months to 31 December 2020
ORIGINAL |
6 Months to 31 December 2020
UPDATED |
6 Months to 31 December 2020
ORIGINAL |
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|
Total Project |
Total Project |
Net Attributable |
Net Attributable |
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|
Gross boe |
Gross boe |
Net boe |
Net boe |
|
|
Falcon* |
2,191 |
– |
1,096 |
– |
|
Stanley |
24,982 |
24,982 |
3,984 |
3,984 |
|
Greater Stanley |
936 |
926 |
187 |
185 |
|
Arkoma |
615 |
– |
123 |
– |
|
Welch** |
5,845 |
5,845 |
4,481 |
4,481 |
|
Total boe |
34,569 |
31,753 |
9,871 |
8,650 |
Net production means net to Mosman’s working interest before royalties
* Falcon production started on 11 December.
** Welch has now been sold
John W Barr, Chairman of Mosman commented: “The updated production report shows the significant benefit of Falcon-1 production, noting that Mosman only benefitted from production from 11 December 2020. With drilling planned at Stanley, Champion and/or Challenger projects we anticipate further increases to our production in the coming months and have an objective to be involved in at least four new wells in 2021 subject to funding and other matters.”
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 John W Barr, Executive Chairman Andy Carroll, Technical Director
|
NOMAD and Joint Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Adam Cowl +44 (0) 20 3470 0470
|
|
Alma PR Justine James +44 (0) 20 3405 0205 +44 (0) 7525 324431
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Joint Broker Monecor (London) Ltd trading as ETX Capital Thomas Smith +44 (0) 20 7392 1432 |
Updates on the Company’s activities are regularly posted on its website: www.mosmanoilandgas.com
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 MMBTU |
Million cubic feet per day
Million British Thermal Units |
Mosman Oil & Gas #MSMN – Operations update
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces an update on operations in the US.
Stanley
The Operator has recently recompleted Stanley-1 in a zone that has been productive in Stanley-2, and initial flow rates (3 day average) are 47 bopd gross. The Company will provide a further update in due course once production rates have stabilised at Stanley-1.
Stanley-2, 3 and 4 continue to produce oil, with a total project production (including Stanley 1) of circa 260 bopd (3 day average) gross. Mosman has 16-18% working interest in these wells. Water production is managed by on-site water injection that has not been affected by recent unusual cold weather conditions.
Falcon
Minor equipment upgrades have been installed at the Falcon-1 well. The well has been temporarily shut-in since 15 February due to the weather conditions, to avoid water vapour freezing in the gas lines. Oil production and produced water is stored in tanks and has to be trucked off site. The Operator expects to have the well back on production once freezing conditions end, which are forecast to improve and warm up on Saturday. Mosman has 50% working interest in this well. Further updates will be provided in due course.
Other Production
The majority of current production comes from the Stanley and Falcon projects. Mosman has not been advised of any effect of the weather on other facilities such as Greater Stanley and Arkoma.
Drilling opportunities
Mosman confirms its intention to participate in the drilling of multiple wells in the 2021 year.
The candidates for drilling include 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 Greater Stanley, Cinnabar and Galaxie. Of these projects, Mosman only has control of the timing of operations where it is the Operator, at the Cinnabar lease.
The Cinnabar lease acquisition is considered a potential cornerstone of the Challenger Project to re-develop the proven oil producing area. Mosman has 97% working interest (reducing to 85% upon drilling of the first well) in the Cinnabar lease and is the Operator. The initial review of existing data has led Mosman to commit to a full field redevelopment study that will be based on technical work which includes the following:
· Acquiring additional seismic data
· Reprocessing the seismic data
· Revised geological model
· Acquiring additional leases
· Identifying optimal drilling locations
· Designing wells
· Drilling planning
The successful drilling of Falcon-1 means there are several prospects to be drilled in the Falcon and Galaxie lease area (Champion Project). The Falcon-1 well production data will be used to estimate the size of that gas field, and to update the geological model, before a decision is made where to drill the next well in the Champion Project. Mosman has 50% interest in the Falcon lease and 60% working interest in the Galaxie lease.
There are several potential wells in the Greater Stanley area that require further work before being ready to drill. The work includes leasing, gaining well spacing approval and technical work to determine optimal target locations. The zone that is producing at Stanley-1 and 2 is thought to extend in to the Duff lease, and is a candidate for recompletion of the Duff-2 well. Mosman has 20% working interest in the Duff lease.
John W Barr, Chairman, said: “Mosman appreciates the work and effort that is involved in getting a project completed and maintaining solid production. Presently, the Covid pandemic, heavy rain and this severe cold weather are examples of reasons why things sometimes take longer than anticipated.
“For the moment, the safety of people, and the operations is imperative. Hopefully, normality will return shortly, along with communications that have been difficult due to rolling power blackouts.”
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 John W Barr, Executive Chairman Andy Carroll, Technical Director
|
NOMAD and Joint Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Adam Cowl +44 (0) 20 3470 0470
|
|
Alma PR Justine James +44 (0) 20 3405 0205 +44 (0) 7525 324431
|
Joint Broker Monecor (London) Ltd trading as ETX Capital Thomas Smith +44 (0) 20 7392 1432 |
Updates on the Company’s activities are regularly posted on its website: www.mosmanoilandgas.com
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 MMBTU |
Million cubic feet per day
Million British Thermal Units |
Mosman Oil & Gas #MSMN – 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 31 December 2020 |
6 Months to 31 December 2020 |
6 Months to 30 June 2020 |
6 Months to 30 June 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 MMBTU |
Million cubic feet per day
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 John W Barr, Executive Chairman Andy Carroll, Technical Director
|
NOMAD and Joint Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Adam Cowl +44 (0) 20 3470 0470
|
|
Alma PR Justine James +44 (0) 20 3405 0205 +44 (0) 7525 324431
|
Joint Broker Monecor (London) Ltd trading as ETX Capital Thomas Smith +44 (0) 20 7392 1432 |
Updates on the Company’s activities are regularly posted on its website: www.mosmanoilandgas.com