Last checked at 20 Apr 2022 07:00
20 April 2022
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Q3 Production Update
Robust quarter with a 65% increase in net production
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces its production summary for the three months ended 31 March 2022 ("March Quarter"), reporting a 65% increase in net production and significant further development potential in existing production leases.
The Company has a portfolio of development and exploration projects, with a clear focus on maximising the opportunity for further production growth and increasing cashflow. In addition to its US projects, Mosman has two exploration areas in Australia which are well positioned to take advantage of the increasing demand for Helium and Hydrogen, in addition to Oil and Gas.
US Production
Net Production attributable to Mosman for the three months was 11,756 boe, an increase of 4,633 boe, or 65% from the three months to December 2021 of 7,123 boe. The numbers include increased production from a re-completion at Falcon and initial production from Winters-2 (March 2022) but does not reflect the recent production increase at the Winters-2 well announced on 12 April 2022.
Production Summary
3 Months to 31 March 2022 | 3 Months to 31 December 2021 | |||
boe | boe | |||
| ||||
Gross Project Production | Net Production to Mosman | Gross Project Production | Net Production to Mosman | |
Gross boe | Net boe | Gross boe | Net boe | |
Falcon | 10,488 | 7,866 | 5,944 | 4,458 |
Stanley | 7,197 | 2,799 | 5,130 | 1,741 |
Livingston | 686 | 137 | 172 | 35 |
Winters | 3,335 | 778 | 173 | 50 |
Greater Stanley | - | - | - | - |
Arkoma | 703 | 176 | 3,362 | 839 |
Total boe | 22,409 | 11,756 | 14,781 | 7,123 |
The Net Production of 11,756 boe produced in the March Quarter consisted of 2,951 barrels of oil and 51,066 MMBtu of gas.
The average sale prices achieved during the period was US$89.53 per barrel for oil and US$4.13 (January and February only) per MMBtu for gas (in each case after transport and processing costs but before royalties). Current prices of both oil and gas have increased since the end of the quarter, with the Henry Hub reference gas price currently in excess of US$7.50 per MMBtu.
The Net Production of 29,100 boe in the first 9 months of this Financial Year already exceeds the 22,284 boe produced in the 12 months of the 2021 Financial Year.
Production numbers in the March Quarter are based on the current best available data and are subject to adjustment upon receipt of final sales invoices from the purchasers of products.
Falcon (75% Working Interest)
The well was recompleted in December 2021 and since that time has continued to produce steadily with minimal water production.
Galaxie (85% Working Interest)
Several potential drilling locations have been identified. Further technical work is required before making any decisions.
Stanley (various 34.85% to 38.5% Working Interests)
Details on the status of the five production wells at Stanley are:
· Stanley-5 was placed on production in December 2021.
· Stanley-4 is now connected to the new gas infrastructure with initial flow rates of c. 275 thousand cubic feet per day, which is c. 53 boepd, and is providing gas for gas lift to Stanley-5 as well as contributing to gas sales.
· Stanley-3 continues to produce steady oil rates.
· Stanley-2 production has declined and this well is a candidate for recompletion.
· Stanley-1 gravel pack was not successful and the well will be worked over again.
Winters-2 (23% Working Interest)
Production of gas from the Winters-2 well commenced in late February 2022 and as a result, this quarter reflects one full month of initial gas production. As announced on 12 April 2022, the gross production flow rate in the period from 6 to 10 April averaged 902 Mcfpd which is circa 1,012 MMBtu or 170 boepd. In addition, 10 bopd were produced bringing the five-day average gross production to 180 boepd, representing an increase of c. 31% on the gross production rate as previously reported.
Livingston (20% Working Interest)
The Livingston property was one part of the acquisition of Nadsoilco LLC ("Nadsoil"). One well (Davis & Holmes 11) that has been shut-in for over one year was successfully worked over and put on production in December.
Greater Stanley (40% Working Interest)
The strategy on these leases remains under review. These leases are adjacent to the Winters lease where Winters-2 was drilled and is now on production.
Arkoma (27% Working Interest)
Production had been increasing in the previous quarter. Unfortunately, the site was hit by lightning early in the March Quarter, which caused a fire and some tanks and control systems were damaged. One well has recently been brought back on production and work is underway to restore production from the other wells. This asset is being held for sale as other projects are preferred for further investment.
John W Barr, Chairman, said: "Mosman is very pleased to report a 65% uplift in net production despite a temporary disruption at Arkoma. The completion of gas infrastructure at Stanley/Winters in East Texas is a significant milestone, which opens up development potential and benefits revenue, especially with current strong gas prices. We continue to make steady progress and are increasing production, with significant further development potential in existing leases.
"In Australia, we are well positioned to take advantage of the increasing demand for Helium and Hydrogen, in addition to Oil and Gas, through our two exploration areas and are excited to see the opportunities that these projects will deliver in the medium term."
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service ('RIS'), this information is now considered to be in the public domain.
Glossary:
boe | Barrels of oil equivalent based on calorific value as opposed to dollar value |
boepd | Barrels of oil per day of oil equivalent based on calorific value as opposed to dollar value |
bopd | Barrels of oil per day |
Gross Project Production | Means the production of BOE at a total project level (100% basis) before royalties (where Mosman is the Operator) and where Mosman is not the operator the total gross production for the project |
Mcf | Thousand cubic feet |
Mcfpd | Thousand cubic feet per day |
MBtu | One thousand British Thermal Units |
MMBtu | One million British Thermal Units |
Net Production | Net to Mosman's Working Interest; Net Production attributable to Mosman means net to Mosman's Working Interest before royalties |
Enquiries:
Mosman Oil & Gas Limited John W Barr, Executive Chairman Andy Carroll, Technical Director jwbarr@mosmanoilandgas.com acarroll@mosmanoilandgas.com | NOMAD and Joint Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Adam Cowl +44 (0) 20 3470 0470 |
Alma PR Justine James / Joe Pederzolli +44 (0) 20 3405 0205 +44 (0) 7525 324431 mosman@almapr.co.uk | Joint Broker Monecor (London) Ltd trading as ETX Capital Thomas Smith 020 7392 1432 |
Updates on the Company's activities are regularly posted on its website:
www.mosmanoilandgas.com
Notes to editors
Mosman (AIM:MSMN) is an oil exploration, development, and production company with projects in the US and Australia.
Mosman's strategic objectives remain consistent: to identify opportunities which will provide operating cash flow and have development upside, in conjunction with progressing exploration of existing exploration permits.
The Company has seven projects in the US: Stanley, Greater Stanley, Livingston, Winters, Challenger and Champion in East Texas and Arkoma in Oklahoma in addition to exploration projects in the Amadeus Basin in Central Australia.