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Mosman Oil and Gas lines up next drilling projects as producing portfolio builds

Snapshot

  • Oil and gas explorer with acreage in US and Australia
  • Strategic alliance over fields in Texas with Baja
  • Third well at Stanley flowing successfully
oil well

Quick facts: Mosman Oil And Gas Ltd

Price: 0.24 GBX

AIM:MSMN
Market: AIM
Market Cap: £2.13 m
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What it owns

Mosman Oil And Gas Limited (LON:MSMN) has a raft of exploration and production interests in shale licences in the US and Australia.

US

Arkoma Stacked Pay Project (Oklahoma)

Mosman's wholly-owned subsidiary owns a 27% interest in the Arkoma Stacked Pay Project which has production of oil and gas, sold to local refineries.

Welch Permian Basin (West Texas)

Located in the Permian Basin consisting of 27 existing wells of which ten are currently producing. A feasibility study will consider horizontal drilling at Welch, where Mosman is the operator.

Stanley (East Texas)

Under the umbrella of a strategic alliance, Mosman and Baja Oil and Gas are also participating in several projects onshore east Texas. These include the Stanley, Challenger and Champion projects.

Mosman acquired a 16.5% working interest in Stanley by paying 22% of the first two wells, which are now producing at a commercial rate, and reimbursing a small amount of previous expenditure. 

The Stanley-3 well, in which Mosman owns 14.85% interest, yielded some 2,428 barrels in September which equates to 115.6 barrels of oil per day over 20 days of production.

Champion (East Texas)

Originally Mosman owned a 60% working interest in Champion, containing the Falcon prospect and the Galaxie prospect, before striking a farm-out deal to bring in new partner Xstate Resources that could take a 25% stake if it fulfils its obligations.

However, Xstate pulled out of the farm-in agreement in the summer as part of a cost-saving strategy, pushing back the planned drill date.

Strawn Oil Project (Texas)

Mosman sold out of the 27-well project in July after deciding that it had provided a "small but important" stepping stone by leading to the acquisition of the more exciting Welch.

Australia

Amadeus Basin

One granted permit and one application which covers a total of 5278 sq. km. The Amadeus Basin is considered one of the most prospective onshore areas in the Northern Territory of Australia for both conventional and unconventional oil and gas, and hosts the producing Mereenie, Palm Valley and Surprise fields.

The company has signed preliminary agreements with undisclosed parties for a potential joint venture, which will allow funding for seismic works and well planned for next year.

 

What the boss says: John Barr, chairman

“Mosman's focus remains delivering on its strategic objective. We have made considerable progress in acquiring projects and building production however this is only the start of this next phase of growth and we remain focussed on sustainable production and identifying projects that meet our strict criteria.”

 

How it is doing

In the year to the end of June, the company saw revenue rise to US$1.11mln from US$740,853 the previous year but this only tells half the story as two of its wells (Stanley 1 & 2) only commenced production this year while Stanley-3 has come on stream in the current financial year.

Cash and cash equivalents at the end of the financial year stood at US$823,959, compared to US$1.32mln a year earlier.

Net production attributable to Mosman during the year was 18,216 barrels of oil equivalent, compared to 10,367 in 2018, representing an increase of 76%.

 

Inflection points

  • The company believes  becoming cash flow positive is “an increasingly achievable objective”

 

Blue Sky

  • Stanley-3 should add to output with longer-term potential for a fourth wells at the field

  • Horizontal wells to boost production at Welch

  • Funding secured for two wells at Champion prospect in Texas

 

 

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Watch

Mosman Oil and Gas sees highest flow rate yet at Stanley project from third well

Mosman Oil and Gas Limited's (LON:MSMN) Andy Carroll speaks to Proactive London after announcing that the Stanley-3 well in Texas has been completed. He says the well struck a six-foot interval during completion operations with the recovered fluid 100% oil. Carroll adds they'll be looking...

on 12/9/19

3 min read