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Mosman Oil and Gas jumps as it reports a sales revenue increase of almost 200%

In a production update, the oiler reported sales revenue of US$534,000, a 191% increase on the previous six month period, while net production increased 35% to 4,417 boe
Oil wells
Mosman also said it expected production and sales numbers to continue to grow strongly

Mosman Oil And Gas Limited (LON:MSMN) saw its shares jump in lunchtime trading Tuesday after reporting an almost 200% increase in sales revenue in the six months to 30 June 2018.

In a production update for the period, the AIM-listed oiler reported sales revenue of US$534,000, a 191% increase on the previous six month period, while net production attributable to the company increased 35% to 4,417 barrel of oil equivalent (boe).

WATCH: Welch proving to be a 'star performer' as Mosman Oil And Gas increases production

The company added that total gross production across all of its underlying acreage on a total project basis was 12,260 boe over the period, a 28% increase on the prior period.

Mosman also said it expected production and sales numbers to continue to grow strongly due to rod replacements and potential horizontal wells at its Welch Permian Basin project in Texas as well as new electric submersible pumps (ESPs) at the Arkoma Stacked Pay project in Oklahoma.

Regarding the Welch wells, the firm said a final decision was subject to completion of its economic evaluation, a development plan, permitting, prevailing economic conditions and funding alternatives, adding that it was also in discussions with the Texas Rail Road Commission to secure well approvals with an investment decision due later this year.

At Arkoma, in which it holds a 27% stake, Mosman said the recently installed ESPs at two wells at the site had been disrupted by weather events and water injection issues. Following the upgrade work to the water injection facilities, the wells would be brought on production but it would take time to establish steady flow rates.

READ: Arkoma operations temporarily disrupted by thunderstorms, says Mosman Oil and Gas

The only decline in production was at the company’s Strawn project in Texas, in which it holds a 50% stake, where production for the six months declined 11.5% to 608 barrels.

John W Barr, chairman of Mosman, said: "If production at existing projects is maintained, and we achieve the planned success at Welch and Arkoma, production from could see a further significant increase over current levels. The task now is to continue to develop Mosman to achieve that success."

Mosman shares were up 42.1% at 0.6p.

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