RNS Number : 0852J
Mosman Oil and Gas Limited
11 August 2023
 

11 August 2023

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

USA Production & Development Update

 

Mosman Oil and Gas Limited (AIM: MSMN) the oil and gas exploration, development, and production company, announces its production for the year ended 30 June 2023 ("FY23"), and an update on development in the USA.

 

Production

 

·      FY23 Net Production of 31,067 boe (FY22: 37,915 boe). 2023 was impacted by the halt in production at Falcon due to water ingress. Whilst there is remaining potential at Falcon, the lower gas prices meant a workover is not a high-ranking investment alternative.

·     Achieved 73% annual increase in production at Stanley with installation of gas lift and jet pumps.

·      Production for the June 2023 quarter was 15,332 boe gross and 5,937 boe net. Production was materially lower than the March quarter (28,632 boe gross, 11,960 boe net) mainly due to issues at Cinnabar as well as increased sand production issues requiring additional screens and clean outs at Stanley. Some wells may be optimised by changing back to gas lift.

·      Work continues at the Cinnabar project to optimise production on all three existing wells on the lease and planning for drilling the next development well (that is subject to funding). At G-2, the well has been serviced and a fracture stimulation is expected to be conducted in the week commencing 13 August 2023.

 

John W Barr, Chairman, said: "The Company continues to develop and maintain its portfolio of projects, with a clear focus on its strategic plan to maximise the opportunity for further production growth and increasing cashflow. Whilst we are disappointed with the outcome at Falcon, the resolution of sand issues at Stanley and currently happening workovers at Cinnabar may deliver a more sustainable growth in production."  

 

USA Production

 

Net Production attributable to Mosman for the year ended 30 June 2023 was 31,067 boe. The decrease was primarily due to the production halting at Falcon, which was somewhat offset by increased production at Stanley and new production at Cinnabar.

 

Production Summary

 




Gross Project

Production

Net Production to

Mosman

Gross Project

Production

Net Production to

Mosman

Falcon

-

-

29,114

21,836

Stanley

44,915

16,844

26,212

9,746

Cinnabar

8,465

6,349

-

-

Livingston

2,654

531

1,530

306

Winters

22,733

5,304

14,726

3,456

Arkoma

8,166

2,039

10,294

2,571

Total

86,933

31,067

81,876

37,915

The Net Production of 31,067 boe produced in the FY23 consisted of 21,503 barrels of oil and 55,474 MMBtu of gas.

 

For the June quarter, net production was 5,937 boe and consisted of 4,845 barrels of oil and 6,331 MMBtu of gas. The average sale prices achieved during the June 2023 quarter was US$73.02 per barrel for oil and US$1.70 per MMBtu for gas. (March quarter was US$73.46 and US$3.49) (in each case after transport and processing costs but before royalties).

 

 




Gross Production

Net Production to Mosman

Gross Production

Net Production to Mosman

Stanley

9,949

3,744

13,753

5,028

Cinnabar

1,775

1,332

6,690

5,017

Livingston

350

70

535

107

Winters

1,334

311

6,324

1,476

Arkoma

1,924

480

1,330

332

Total

15,332

5,937

28,632

11,960

 

Stanley (34.85% to 38.5% Working Interests)

 

Whilst production at Stanley was lower in the quarter, annual production increased 73%.

 

Jet pumps were installed on three wells that increased production, however that also increased operating costs and sand production. The optimal production method for each well is being reviewed and it may be that some wells are returned to gas lift.

 

A seismic mapping project has recently been completed detailing significant remaining potential in the Stanley leases.

 

Winters-2 continues to produce both gas and oil with the help of gas lift.

 

Cinnabar Project (75% Working Interest)

 

At Cinnabar, production was down as advised. Mosman has completed a detailed development plan for the lease which now in theory has three wells with the ability to produce, and each well has produced some oil which is included in the quarterly numbers of gross 1,775 boe. The plan is gradually being implemented with recently installed gas infrastructure currently being used to enable gas lift, and work continues to optimise production on the three existing wells, including the frac of one zone at Cinnabar-2 which is planned in the week commencing 13 August 2023.

 

Production numbers are based on the current best available data and are subject to adjustment upon receipt of final sales invoices from the purchasers of products.

 

Cash position

 

At 31 July 2023, Mosman had cash at bank of circa AU$0.8 million.

 

Funds raised in the July and April placings have been and continue to be expended as follows:

1.  Mosman's share of the connection fee to connect the Cinnabar Project gas flowline;

2.  Costs associated with the Corporate Review;

3.  Applications, documentation, and fees related to approvals for seismic acquisition in EP 145 as well as management activities including soil and water sampling for hydrogen and helium and Central Land Council annual fees;

4.  Additional investment at Cinnabar to provide gas lift to optimise production at existing wells;

5.  Additional costs of workovers and stimulation to optimise production at Cinnabar wells; and

6.  Expenditure related to the new lease area near Cinnabar including lease costs and technical work to identify preferred drilling locations.

 

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.

 

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

+44 (0) 20 3405 0205

+44 (0) 7525 324431

mosman@almapr.co.uk

Joint Broker

CMC Markets UK Plc

Douglas Crippen

+44 (0) 020 3003 8632

 

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 its existing exploration permit and permit application. The Company has several projects in the US. In addition to exploration projects in the Amadeus Basin in Central Australia.

 

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

MBtupd

One thousand British Thermal Units per day

MMBtu

One million British Thermal Units

MMBtupd

One million British Thermal Units per day

Net Production

Net to Mosman's Working Interest; Net Production attributable to Mosman means net to Mosman's

Working Interest before royalties

 

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