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Murchison

The Murchison permit

Mosman has a 100% interest in the Murchison permit which covers some 517 sq. km and is located approximately 100 km north of Mosman's Petroleum Creek Project.

The Murchison permit came in to effect on 1 April 2015.

Three exploration wells have been drilled on the Murchison permit and one nearby.  The Murchison permit contains the Blackwater-1 oil and gas discovery as well as a number of oil and gas seeps.

SRK Consulting (Australasia) Pty Ltd (“SRK”) reported in 2015 in respect to the Murchison Permit Prospective Resource.

Table 1:  Estimated Tight Gas and Oil Prospective Resources for the mapped northern part of Murchison PEP 57068 block

  Murchison Unconventional Tight Gas

  P90

  P50

  MEAN

  P10

  Prospective Resources

  Recoverable Gas (Bcf)

  9,543

  13,271

  13,695

  18,546

  Recoverable Oil

  (MMbbl)

  148

  159

  164

  196

Source: SRK

 

Table 2: Estimated Prospective Oil Resources for the Te Wiriki Anticline

  Te Wiriki Prospect
  Prospective Oil Resources
  (MMbbl Recoverable)

  P90

  MODE

  P50

  MEAN

  P10

0.06

0.03

0.40

1.13

2.92

Source:  SRK

Prospective Resources on the Te Wiriki Prospect are for the full structure; approximately 34% of the lowest part of the fault dependent closure extends beyond the block held by Mosman.

Prospective resource definitions

The estimated prospective resources summarised in Table 1 are associated with tight gas. Tight Gas Formation (“TGF”) is defined by SPE (2011) Guidelines to be “a reservoir that cannot be produced at economic flow rates nor recover economic volumes of natural gas unless the well is stimulated by a large hydraulic fracture treatment or produced by use of a horizontal wellbore or multilateral wellbores” .

In relation to Murchison Tight Gas, in its Report, SRK notes: “The risks comprise mainly the stimulated rock volume accessible per well and the amount of wet condensate liquids producible from the gas. Risks on the tight gas volumes are low, however the economic production characteristics remain to be proven.”

With respect to the oil prospective resources summarised in Table 2 that are associated with the Te Wiriki prospect, in its Report, SRK notes: “It is considered the play is proven by the small oil and gas flows [that] were recorded from the nearby Blackwater-1 well. The Te Wiriki structure has identified local oil seeps however conventional reservoir quality is a significant risk.”

The hydrocarbon volumes estimated in the SRK Report should not be considered as either contingent resources or reserves. Further exploration and development work in the form of appraisal drilling, well testing and assessment of recovery factors will be required to be able to quantify net resources in relation to the Company’s licence areas and to confirm commerciality.

Ongoing technical programme

The commissioning of the SRK Report is one of a series of steps in Mosman’s evaluation of the Murchison permit and its contents will be incorporated into the wider technical evaluation of the permit before any final drilling location decision is taken and well design is finalised. Technical work is continuing.