Mosman Oil and Gas Limited has agreed to acquire an additional 25% working interest in the Falcon lease and 25% of the adjacent Galaxie lease, both in East Texas.
As a result of the acquisition, Mosman's share of production increases by circa 30 barrels equivalent per day from 60 to circa 90 boped.
The oiler will pay Baja Oil and Gas US$160,000 cash for the additional interests.
Mosman added it will gain more control over the timing of technical work and operations at Falcon while it becomes operator at the Galaxie lease.
Production at the Falcon-1 well recently has been steady at an average flow rate of circa 112 boepd of gas and 7 bopd of oil condensate for a total of 119 boepd.
Unaudited gross revenue from Falcon-1 in June is estimated to be circa US$$40,000 after royalties.
Baja has agreed to use part of the US$160,000 consideration to repay an existing debt to Nadsoilco; monies owed by Baja for work at the Falcon-1 well, and a prepayment towards the drilling of the Stanley-5 well.
John W Barr, chairman, said: "The board is delighted to yet again increase its production portfolio in Eastern Texas, and to increase ownership and control of additional acreage."