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Mosman Oil and Gas generates cash from Welch project in Texas

The first phase of workovers has established production of up to 40 barrels per day
oil well
Production from the Welch project was 3,558 barrels

Mosman Oil And Gas Limited (LON:MSMN) produced 3,558 barrels of oil in the four months to January from its Welch project in Texas.

Cash flow from the project was also positive over the period.

READ: Mosman Oil and Gas Limited starts looking horizontally at Welch project

The first phase of workovers has established production of up to 40 barrels per day.

An investment decision on a horizontal drilling programme will be taken later this year after a reserves report.

In Oklahoma, initial oil and gas production rates from the Union Valley zone of the Arkoma Stacked Pay project (10%), indicated that it alone may be sufficient for economic field development at Arkoma.

The operator, though, proposes to produce the Wilcox together with the Viola, Woodford and Union Valley oil and gas production zones.

WATCH: Crucial few weeks for Mosman ahead of Arkoma investment decision

Mosman has an option to take its stake up to 55% and will make an investment if it is satisfied with a study also commissioned from Moyes & Co. That is due by the end of the month.

The company 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 assessment results.

At Strawn in Texas, initial flow rates were not maintained and no further workovers are planned in the short term.

Two other potentially attractive acquisition opportunities have been identified said John W Barr, Mosman’s chairman.

“Encouragingly, 2018 has started positively with increasing cash flow," he added.

Elsewhere, Mosman has replaced all of the directors of GEM International Resources (CVE:GI) with its own nominees including John W Barr.

Mosman owns 7.6mln shares in GEM, which is currently suspended on the Canadian Venture Exchange after failing to lodge its financial report.

Shares rose 55% to 1.40p.

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