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Mosman Oil & Gas #MSMN – Increase interest in Greater Stanley and Falcon Well Update
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces an update on its Greater Stanley Project and Falcon well in East Texas.
Acquisition
Mosman has acquired an additional 20% interest in the Duff lease, an existing oil producing lease covering 36 acres which forms part of the Greater Stanley Project, adjacent to the Stanley Project. This increases Mosman’s working interest in Duff to 40%, following acquisition of the initial 20% in February 2020.
The Operator has proposed a workover to re-complete the Duff-2 well in a zone which has previously been productive at Greater Stanley and Mosman has agreed to a workover well in order to raise production rates.
Mosman’s share of the workover (USD20,000) and the acquisition cost (USD15,000) are being funded out of the Company’s existing cash resources.
Greater Stanley Project
This Project currently comprises two leases, Duff and Kimes. There is not currently any independent report to quantify resources or reserves at the Greater Stanley Project. The Duff lease has two currently producing wells, and produces about 160-180 bbls /month. Contour Exploration and Production is the operator.
Falcon well update
Despite a 6-day shut in for freezing weather, Falcon produced 12,405 Mcf (gross) of gas with a thermal value of 13,942 MMBtu (gross) in February 2021. Additionally, 180 Barrels of oil (gross) were produced and sold from site. This compares to the January production of 21,805 Mcf (gross) of gas with a thermal value 23,475 MMBtu (gross) and production and sale of 365 Barrels of oil (gross).
As previously notified, hydrocarbon production has been adversely affected since the beginning of March due to increasing water production which is adversely affecting the economic return on the well.
The Operator at the Falcon Project, in which Mosman has a 50% interest, has reviewed the recently acquired production logs, and has recommended the well be completed in a higher zone.
Production logs identified that the water is flowing through the well’s lowest perforation and thought to be coming from a lower water bearing zone. The Operator recommends that the JV re-completes the well in a higher zone with the potential to possibly return to the current zone later. There are two additional hydrocarbon bearing sands above the current producing zone. These two zones have indicated gas pay from wireline logs and have flowed gas from nearby wells. The recompletion plan would entail squeezing the current zone with cement and perforating the next zone.
The estimated cost of the workover is USD 20,000 (gross) will be paid from the existing cashflow from Falcon.
If the JV supports the recommendation the Operator expects to undertake the workover in the near future.
John W Barr, Chairman, said: “Mosman is pleased to acquire an additional interest at Greater Stanley which continues the strategy of building on the core assets of proven conventional oil production in East Texas.
“At Falcon, whilst the well has been impacted by weather conditions and the current production is lower than anticipated, we are encouraged by the proposal from the Operator to recomplete at a higher level to resolve production.”
Qualification 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 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 020 7392 1432 |
Updates on the Company’s activities are regularly posted on its website:
Mosman Oil & Gas #MSMN – £1.5m Placing completed for Helium, Hydrogen and Hydrocarbon Exploration at EP-145 and Update on Falcon well
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company announces an update on its 100% owned EP-145 project in the Amadeus Basin, in the Northern Territory of Australia and the completion of a £1.5 million Placing to fund the next phase of development of this project. Mosman also provides an update in respect of recent developments at the Falcon well where the Operator of the Falcon-1 well in East Texas, USA, has reported that the downhole logs have been completed and a course of action agreed.
Placing to fund EP145 exploration
Mosman had considered joint venture partnerships to develop EP-145, however, on further review the Board believes it is an exciting opportunity and would be beneficial to retain its 100% ownership. With the benefit of a £1.5m placing, Mosman now plans further exploration on this project in the Amadeus Basin where drilling results in nearby permits have demonstrated the commercial production of hydrocarbons and the presence of significant amounts of helium (up to 6% in Magee-1) and hydrogen.
The Placing will fund all the following work planned for 2021. It does not include drilling wells.
• Airborne gravity survey in June 2021 to provide more detail regarding the deep geology in the permit, in particular the presence and distribution of salt deposits that provide the seal for helium, hydrogen and hydrocarbons.
• The processing and interpretation of gravity data and updating the geological model.
• The acquisition of seismic in September/October 2021 aimed at defining a drilling prospect.
• The processing and interpretation of seismic data November/December 2021.
• Planning and long lead items for drilling.
John W Barr, Chairman, said: “ Mosman has always seen the potential in EP-145 and with a global shortage of helium and demand increasing, combined with the opportunity to fund this exciting exploration project, we look forward to the results of the next phase of the exploration programme later this year.”
Details of the Fundraising
To fund the exploration programme and drilling at EP-145, the Company has raised £1.5m (before expenses) by way of a placing of 1,000,000,000 new ordinary shares of no par value in the capital of the Company (“Placing Shares”) through the company’s broker Monecor (London) Ltd, trading as ETX Capital, at a placing price of 0.15p per share (the “Placing Price”) (the “Placing”). Investors are also receiving a one for two warrant exercisable at a price of 0.25p with a term of 24 months (the “Placing Warrants”).
Helium
Helium has become an increasingly valuable strategic resource, used in medical, nuclear and space technology and a vital element in the manufacture of MRIs, semiconductors, and is critical for fibre optic cable manufacturing. The demand for Helium significantly exceeds current production levels and this undersupply has pushed prices to over 100 times that of natural gas resources.
Until relatively recently most of the Helium resources were supplied by the US, however, Australia is currently one of the leading producers of Helium, producing 3% of the world’s supply and holds significant potential resources to expand production.
The Bayu-Undan gasfield located offshore in the Timor Sea is a source of Helium to the LNG plant in Darwin. The Helium accounts for 0.1-0.3% of raw feed gas and after processing comprises A grade liquid Helium.
Two wells have drilled into the older Proterozoic stratigraphy of the Amadeus Basin and both have encountered naturally occurring helium gas. The first well, Magee-1, drilled in 1992 flowed gas containing 6.2% Helium from the Heavitree Quartzite which directly overlies fractured grantic basement. A second well, Mt Kitty-1 drilled in 2014, encountered gas within fractured basement, containing up to 12% Helium. These extremely high concentrations are amongst the highest in the world to date.
Helium production has been primarily associated with natural gas production these high concentrations observed in the Amadeus Basin may be sufficient to enable helium extraction independent of natural gas (Waltenberg, 2015).
Mosman Australian Operations
Mosman Oil and Gas operate its Australian permits from Sydney, Australia and have a highly experienced technical team. Technical director, Andy Carroll has 40 years of international operating experience including drilling and production with BP. Geological Advisor, Dr Julie Daws has over 25 years in the oil and gas industry working with large multi-national companies including ConocoPhillips, Statoil and independent Australian producers in hydrocarbon basins across the world. Andy and Julie have been involved in progressing EP 145 for several years with visits to EP 145 and meetings with the government and the Central Land Council. The team utilizes the expertise of Australian based Geophysical companies, including Synterra Technologies to acquire seismic and other geophysical surveys.
EP-145
Permit EP145 contains proven hydrocarbon resources in traditional post-salt plays and there is evidence from seismic of large, pre-salt structures with the potential to hold significant resources of helium and hydrogen in addition to natural gas. Operators of adjacent permits EP 112 and EP 115 have identified large prospects including Dukas and Zorba (ref Central Petroleum Limited).
Other Matters
The fundraising is being completed by the company’s broker Monecor (London) Ltd, trading as ETX Capital. ETX will receive 20 million two year warrants exercisable at 0.15p (the placing price).
Admission to AIM and Total Voting Rights
The Placing is conditional on, inter alia, the Placing Shares being admitted to trading on AIM. Application will be made to the London Stock Exchange for the Fundraising Shares, which will rank pari passu with the Company’s existing issued ordinary shares, to be admitted to trading on AIM and dealings are expected to commence at 8:00 a.m. on or about 25 March 2021.
Following the issue of the Fundraising Shares, the Company’s share and total voting rights will comprise 3,646,513,052 Ordinary Shares of no par value and the Company does not hold any shares in treasury .
Consequently, the above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.
Falcon well update
The Operator of the Falcon-1 well in East Texas, USA, has reported that the downhole logs have been completed.
The recent production logs indicate water is entering the well bore through the lowest perforation. The well continues to produce oil, gas and water. The Operator is preparing an AFE to squeeze cement and re-perforate the same pay zone to attempt to reduce the water flow. Subject to the results of that workover, the JV may consider completing the well in a higher zone.
Mosman has a 50% working interest in the well and will provide further updates as appropriate including in relation to the impact of reduced Falcon production on the expected results for the financial year ended 30 June 2021.
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 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
Mosman Oil & Gas #MSMN – Falcon Well Update
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company announces that the Operator of the Falcon-1 well in East Texas, USA, has reported a recent increase in water production alongside a fall in pressure at Falcon-1. To manage this, the well head choke size has now been reduced.
These developments have resulted in significantly lower reported oil and gas production rates at Falcon-1. The Operator is assessing the situation and has indicated that it intends to run downhole logs to gather more information in order to recommend an appropriate course of action.
Mosman has a 50% working interest in the well and will provide further updates as appropriate.
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 Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Soltan Tagiev +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 020 7392 1432 |
Updates on the Company’s activities are regularly posted on its website:
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
|
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 |
|
|
Total Project |
Total Project |
Net Attributable |
Net Attributable |
|
|
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
|
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 – Falcon Production
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, is pleased to announce that further to the Operations update on 17 February, the Falcon-1 well in East Texas, USA returned to gas and oil (condensate) production on 21 February as the freezing weather conditions eased.
John W Barr, Chairman, said: “The widespread production challenges in Texas last week, was partly created by the rolling blackouts and freezing weather conditions. Mosman is pleased that the operator at Falcon and the on-site contractors have reinstated production and kept downtime to a minimum.”
Competent Persons 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 Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Soltan Tagiev +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 020 7392 1432 |
Updates on the Company’s activities are regularly posted on its website:
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 – Stanley Operations Update
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces an operations update for the Stanley project in East Texas.
Stanley
The average gross production rate in the last week was 210 barrels of oil per day (“bopd”) compared to the daily average gross production for the six months ending 31 December 2020 of 139 bopd.
Stanley-3 and Stanley-4 continue to produce oil without artificial lift. Stanley-3 is averaging a rate of circa 50 bopd (gross) and Stanley-4 circa 120 bopd (gross).
The second-hand pump-jack installed at Stanley-2 is now fully operational, after some initial problems with the motor that required replacing. In the last week this well has averaged over 40 bopd (gross).
A workover on Stanley-1 commenced prior to the installation of an additional second-hand pump-jack that has already been purchased. Flow rates will be advised once stable flow has been re-established.
Based on discussions with Mosman’s JV partners, it is still anticipated that Stanley-5 will be drilled in the second quarter of the calendar year, and after Stanley-1 is fully back on production.
Mosman’s working interest in the Stanley wells varies from 16 to 18%.
John W Barr, Chairman of Mosman commented: “Mosman has clearly set out a vigorous operational agenda for 2021, and the workovers at Stanley are an essential element to maintaining strong production. As stated previously, Mosman has opportunities to participate in several potential wells in 2021. The candidates for drilling include two wells at the Stanley project 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 detailed technical work.”
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
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:
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Mosman Oil & Gas Limited John W Barr, Executive Chairman Andy Carroll, Technical Director
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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 +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