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Mosman Oil and Gas completes Welch deal, continues to focus on newly acquired asset in US

Other potential acquisitions are under review but the immediate focus is on its new projects
oil and gas operations
Initial programmes at Welch will focus on well workovers

Mosman Oil And Gas Ltd (LON:MSMN) confirmed it has now completed the deal for the Welch Permian basin project  in the US, marking its second acquisition in the last quarter.

It added that other potential acquisitions are under review, but, the immediate focus is on its new projects.

At the Welch project, the plan is to immediately implement a strategy aimed at increasing production from current levels, 34 barrels oil per day, with the initial programme focussing on well work overs. Later, horizontal drilling could follow.

WATCH: Mosman Oil & Gas picks up new assets in Texas

Mosman said it has already identified shut-in wells that will be selected for workovers, and it highlighted that the approach will be similar to the strategy deployed at the Strawn project.

At Strawn in Texas, the company’s plan is to re-invest cash flow from production into well workovers that will increase production, and these operations are ongoing.

The company noted that production in August was dented by limited water disposal due to problems with the main water injection pump. The pump has been repaired and the wells are now unconstrained.

READ: Mosman Oil and Gas gives investor update on US projects

There were no sales from Strawn in August but 170 barrels of crude were sold this week and two further shipments of a similar size are expected shortly.

Elsewhere, at the Arkoma project, the company’s focus is on technical work to estimate resources and to enable the next investment decision.

Mosman has 10% of Arkoma and it has two separate options to acquire additional equity in the project, although both options expire if the first is not taken before October 10. The company noted that 3D seismic data received to date requires further work, progress has been slower that planned and will impact the timing of the anticipated third party resource report.

Meanwhile, operations on site sees additional existing wells coming online for production but the performance is described by Mosman as ‘variable’ and it intend to report details to investors once the “variability has abated”.

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Mosman Oil And Gas Timeline

August 07 2017

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