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Stanley Development Project

Mosman has acquired a 16.5% working interest in this Project by paying 22% of the first two wells and reimbursing a small amount of previous expenditure.  

The Stanley Development Project is supported by Baja’s interpretation of 3D seismic data, integrated with substantial sub-surface well control, and legacy production information.  The first well to be drilled was Stanley-1 which commenced in July 2018.  The well reached the planned target depth of 7,000 feet and hydrocarbon shows were recorded at multiple reservoir levels. 

Stanley-1 is flowing gas and liquid hydrocarbons (condensate).  Production is currently and temporarily constrained by existing surface equipment limitations.  Once the surface facilities are upgraded Baja expects to increase average daily production to approximately 230 boepd.  Production from the well will initially be high yield natural gas and liquid hydrocarbons, and Baja expects that the production mix will change from natural gas with substantial liquid hydrocarbons to oil with substantial associated natural gas.

A well test was recently performed on Stanley-1 to ascertain the potential deliverability of the well. The test was carried out by the operator, Nadsoilco LLC, and independent third parties. This was a controlled test designed to flow the well with gas flared (instead of producing to the restricted gas infrastructure) and to acquire data that may indicate the extent of the oil and gas accumulation. The test rate was limited due to the size of the test separator and was not an absolute open hole test. Over several hours the well was flowed through increasingly larger choke sizes and the flow rate was allowed to stabilise at each stage.

The choke was incrementally increased from 11/64" to 40/64" over a series of steps and the final stable flow was 1,271,000 cfd and 50 bbls per day of liquid hydrocarbons. This is equivalent to 274 boepd (calculated using SPE conversion rate of 0.0001767 barrels per standard cubic foot of gas). By way of comparison, recent  flow rates with  existing infrastructure  were averaging 450,000 cfd  and 10  bbls per day of liquid hydrocarbons. This is equivalent to 90 boepd. Figures stated as gross to the project with Mosman holding a 16.5% Working Interest. 

The operator has advised that planning and negotiating with relevant parties to eliminate pipeline limitations and increase gas processing contract volumes is underway.   The timing of increased production depends on reaching agreement with third parties and completing site work, and an update will be provided in due course.

The Stanley-2 well drill is scheduled to commence drilling in November with results due in early December. The well is expected to be an oil producer with minor amounts of associated gas that can be handled by existing infrastructure.

Additional development wells will then be drilled to develop the multiple oil zones identified in Stanley-1.