Mosman Oil And Gas Ltd (LON:MSMN) has signed a new strategic alliance agreement with Baja Oil and Gas LLC, and, announced the acquisition of stakes in two new opportunities.
It builds on the existing relationship between Mosman and Baja, the operator of the successful Stanley-1 well.
Mosman is now taking a 60% interest in the Champion project and a 16% stake in the Challenger project, paying US$108,000 and US$43,500 respectively.
READ: Mosman Oil and Gas “extremely pleased’ as Stanley starts producing
At Champion, the idea is to follow the same 3D seismic techniques as used to target Stanley-1. The project spans 240 across and is seen to have several drilling locations.
Challenger hosts two production wells, albeit with nominal periodic production. Here, the plan will be to use 3D seismic to identify locations for new development wells – Challenger presently has an estimated 0.84mln barrels of proved and probable reserves.
The acquisitions are being funded from existing cash resources.
"Given the significant results at Stanley-1, we have determined to prioritise existing resources towards the projects that hold the most chance of further increasing production and cash flows, which includes the potential Stanley-2 well, and the Champion and Challenger projects,” said chief executive John Barr.
Next steps for Stanley
Mosman, at the same time, highlighted that it is presently working with Baja to optimise the development of the oil zone in Stanley-1, and it is now at the planning stage for the follow-up at the Stanley-2 well.
The second Stanley well could be drilled in the next few months and other wells may potentially follow that programme in the future.
Under the new strategic alliance deal with Baja, Mosman will effectively have a 50% interest in all its partner’s existing and new projects.
The AIM-quoted company noted it can source new projects and develop existing projects with a very strong local business development and a technical team without establishing its own team and the associated infrastructure.