Mosman Oil & Gas - Corporate & Operations Update
("Mosman" or the "Company")
Corporate and Operations Update
Recent Global Events and Corporate Review
As previously stated, Mosman's business is not immune to the recent exceptional external events including the collapse of the oil price from over
The Board has now concluded a review of all aspects of its operations, with decisive action confirmed including further cost cutting (see details below) as the Board endeavours to balance shareholder interests and cash flow constraints.
Mosman has over the past several years consistently reduced overheads, included closing the
Mosman's two Executive Directors agreed at the time of the last capital raise to take shares in lieu of cash for director and services fees owing at that time and up to
Mosman had until recently been paying its Strategic Alliance Partner in the
Mosman's US operations will continue to be managed effectively by
1. Production continues at Stanley
A workover has just been completed at Stanley-2 and an initial strong increase in oil flow was observed. The well will be returned to production in the next 48 hours.
The workover rig is now in the process of setting up at Stanley-1 to facilitate a workover at that well, with the objective of increasing production.
2. At Greater Stanley, the plan remains to increase production by workovers on the existing producing wells. The first workover may occur in the coming month(s) at a gross cost estimated to be
3. At the Arkoma project, operations were shut in due to work required on the water injection well. The operator has recently advised the injection well is back in operation and production has now resumed. The objective is to work to make the operation break even at current oil prices. Mosman has not contributed significant additional cash to the Arkoma project for some time and does not anticipate the need to do so going forward.
The Welch and Arkoma projects remain for sale but will only be sold if a suitable price is achieved.
As advised, Mosman has signed a Memorandum of Agreement (MOA) and a Heads of Agreement (HOA) with parties in respect of the Amadeus project. Recent events in
Mosman has received correspondence from the
Clearly this brings to a halt all ground based work, and due diligence of potential partners.
Each month Mosman has been incurring modest operational and overhead costs on this project.
The Board has immediately deferred all non-essential expenditure.
Current Financial Position
Mosman has current cash reserves of cA$300,000, has pre-paid its share of Stanley-4 drilling costs (cA$90,000) and current assets include oil inventories, receivables, and shares in Norseman Capital Ltd (previously called GEM) and confirms that creditors are being met within normal business timeframes. The Company has no long term or secured debt and will continue to receive monthly cash receipts from the sale of its net oil production.
Directors hold significant numbers of shares in Mosman and have done so since 2014 when the Company was admitted to trading on AIM.
On occasions, Directors have supported the Company by acquiring shares on market, and receiving shares as payment of fees, rather than cash.
As referred to above, it is planned (subject to shareholder approval), that Directors will receive further shares in lieu of fees in order to preserve cash resources.
The half year results for the period ending
John W Barr, Chairman of Mosman commented: "The Mosman Board has acted quickly and decisively in further reducing costs resulting from the recent exceptional external events with the main considerations for the Company. Operational expenditure, costs and overheads have been immediately curtailed. Despite difficult circumstances, the Board remains determined to deliver value to shareholders from its stated strategy and can confirm it has the full support of its staff and consultants to do so."
Competent Person's Statement
The information contained in this announcement has been reviewed and approved by
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.
John W Barr, Executive Chairman
NOMAD and Joint Broker
+44 (0) 20 3470 0470
+44 (0) 20 3405 0205
+44 (0) 7525 324431
Updates on the Company's activities are regularly posted on its website: www.mosmanoilandgas.com
This information is provided by RNS, the news service of the
Quick facts: Mosman Oil And Gas Ltd
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