Mosman Oil and Gas Ltd (AIM:MSMN) has updated on its US operations, noting that production across all sites remains steady and internal estimates indicate that gross production in April 2023 reached 6,951 barrels of oil equivalent (BOE), with 2,936 BOE net to Mosman.
However, the daily average net production of 101 BOE was lower compared to the previous quarter, primarily due to workovers at the Cinnabar-1 site. The company clarified that these interim production figures are subject to change pending final sales invoices and adjustments.
Regarding major projects, Mosman highlighted the ongoing operations at the Cinnabar site, where production rates from multiple reservoir zones are being established. The company aims to unlock the 1.646mln BOE reserves at Cinnabar through strategic development plans.
Workovers have been conducted, including the re-perforation of the First Wilcox zone and well swabbing, but intermittent production persists. Further workovers, potentially incorporating a successful frac method used in neighboring wells, are planned to optimize production.
At the G-1 well in Cinnabar, oil production varies up to 12 barrels per day following gas injection. Mosman said it is also considering a workover for the G-2 well. The company disclosed that ongoing technical work is underway to prepare a Development Plan for the Cinnabar lease, involving 3D seismic interpretation, geological modeling, and identification of drilling targets.
At the Stanley project, gas infrastructure and workovers have led to improved production. The installation of jet pumps has enhanced production at Stanley 4 and 5, while Stanley 3 is temporarily offline for jet pump installation. The shallower Stanley 1 and 2 wells experienced a minor production loss due to a lightning strike and subsequent equipment replacement.
Mosman reported that Winters-2 production is declining naturally, while Winters-1 has been recompleted as a water injection well. The Arkoma project remains up for sale.
In the update, Mosman chairman, John W Barr, said: "I am pleased that production continues with various operational issues being managed effectively. I look forward to reporting on further progress on the development plan for the Cinnabar Reserves in due course."
As of 31 May 2023, Mosman held approximately A$1.2mln in cash reserves, which included payment for the Cinnabar gas connection.