Shares in Mosman Oil And Gas Ltd (LON:MSMN) more than doubled on Wednesday morning after it confirmed it had bought an 80% interest in a producing Texas oil field.
Mosman told investors that it paid £786,000 for the majority stake in the Pine Mills oil field in Wood County.
The oil and gas explorer will use existing cash resources to fund the purchase, which will still leave it with £1.23mln in the bank.
As part of the deal, Mosman will also take control of the field’s operator – Buccaneer Operating – as well as 12 acres of freehold land and a workover rig.
“The Pine Mills producing oil field enables us to deliver on our stated objective of generating sustainable cash flows as well as offering near-term development upside potential,” said chairman John Barr.
“Our strategy in the near term is to focus on increasing production and capturing the upside we see in the Pine Mills oil field.”
The field has yielded more than 12mln barrels of oil since production first started there back in 1950 and has been producing at 100 barrels of oil per day (bopd) for the past four months.
It has proven reserves of 373,000 barrels of oil, with 477,000 barrels falling into the slightly less certain proven plus probable reserves category.
Shares were up 129% to 1.43p.