Mosman Oil And Gas Ltd (LON:MSMN) told investors that a completed prefeasability study assessing a possible horizontal well project, at the Welch Permian Basin property in Texas, would have “attractive economics” at the current oil price.
The company said the wells would have anticipated oil flow rates of 60 to 120 barrels per day, based on data from nearby wells, and a new reserves study is now underway, due in April.
Mosman highlighted that the first horizontal well could be drilled and brought on production in the third or fourth quarter, and in the meantime a full feasibility study will be undertaken.
The reports will prove important when it comes to financing the project, according to Mosman.
"Mosman is very pleased with the results of the PFS at Welch and has instructed the commencement of the feasibility study,” said John Barr, Mosman chairman.
“The Welch project provides both a strong revenue stream and the foundation for growth.
“The horizontal well development is being systematically progressed and we expect to have several financing alternatives that will be finalised before the final development decision is made by the board."