Mosman Oil And Gas Limited (LON:MSMN) told investors it has now started a study to determine the economics of drilling horizontal wells at the Welch project, where work in recent months has so far focussed on workovers and production optimisation.
Seven wells have been worked over since the programme began in October, and for the month of November oil sales amounted to 689 barrels (in October the figure was 843).
The AIM-quoted oil firm expects the study will be complete during the first quarter of 2018.
Additionally, at the 50% owned Strawn project the company has now completed a second phase of workovers, but, production rates are not at a desired level so options are now being considered – either further investments may be made or instead cost conservation could be prioritised.
Elsewhere, Mosman is continuing discussions over the potential funding of the presently 10% owned Arkoma project, in Oklahoma, ahead of a decision to exercise the company’s option to a 45% in the project.
Mosman sees potential for Arkoma to add both production and oil reserves, but, it will only exercise its option if it can be fully satisfied by the results of a recent assessment of the project.
"We are pleased to achieve progress on our stated goals in 2017,” said John Barr, Mosman chairman.
“The strategy of acquiring oil production when oil prices were low appears to be sound with the recent increase in oil price.
“Rejuvenating the two older oil fields continues to be work in progress, and we are continuing to gather information and adjusting plans accordingly.”
Barr added: "The strategy of taking an option at Arkoma remains sound.
“The multi-reservoir resource and production rates required time to be determined and the value is linked to those matters and the change in oil price."