Australian operator Mosman Oil and Gas Ltd has updated investors on ongoing operations, including recent acquisitions.
The AIM listed oil exploration, development and production company, recently completed the Welch Permian Basin Project acquisition in Texas.
Mosman’s US operating subsidiary will soon take over operations at the 100% owned prospect.
The firm also plans to re-invest free cash flow generated at the Strawn project in Texas (50% interest and operator) with a view to further increasing production with further workovers. .
Production for August 2017 was limited by water disposal to 160 bbls (gross), due to downtime of the main water injection pump.
This pump has been repaired and the wells can now produce unconstrained.
Work is also ongoing at the Arkoma Stacked Pay Project in Oklahoma, where the firm has a 10% interest with options over a further 45%.
Mosman’s immediate focus remains the technical work to estimate the resources and to make the next investment decision.
Both options to acquire further equity at the fixed price expire if the first option is not exercised by October 10.
In a statement, the company said: “The 3D Seismic data received to date requires additional work and thus progress in the last weeks has been slower than planned.
“This will have an effect of the timing of the independent third party Resource Report which has already been commissioned.
“On-site, the Operator continues to bring wells on production and these activities are being closely monitored.
“Production rates at Arkoma have been variable while the Operator has been carrying out work. In order to provide accurate results, Mosman will release production data once this variability has abated.”
However the firm has run up against some problems with projects in New Zealand.
Mosman has been advised by the authorities that the change of condition application for the Murchiston project was declined.
This application was formally made on 28 December 2016 and it has taken over eight months to get a decision.
Whilst waiting for the decision, Mosman has not progressed further work at Murchison and New Zealand Petroleum and Minerals has now advised that Mosman is now non-compliant with its formal permit obligations.
This can be rectified by completing the exploration activities defined in the permit grant, which includes drilling two wells and the completion of 10km of seismic by March 2018.
Mosman will now recommence the planning process in relation to the permit while evaluating its other options.
Mosman also continues to actively pursue a farm-out process on the permit.
Planning continues for the three wells drilled to be plugged and abandoned at Petroleum Creek.
It was expected that a suitable rig will be available in the September quarter to complete the tasks.
This now looks like being deferred. Given the mobilisation costs from the North Island it is planned to complete the task when the rig is in the South island, thus sharing costs.
The freehold property at Petroleum Creek has now been listed for sale, and that sale is expected to cover most of the abandonment costs.
In Australia, the Northern Gas Pipeline (“NGP”) that has commenced construction.
From 2018 the pipeline will provide access for Northern Territory gas to markets in Eastern Australia.
The field geologist report in relation to EP145 remains under review; however the recent USA based investments are being prioritised ahead of this work.
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