Mosman shares fall as it outlines Greater Stanley plans
Oil exploration, development and production company Mosman Oil and Gas has agreed the acquisition of interests in two leases in Texas, it announced on Thursday, as the first step to expanding on the success of the Stanley project.
The AIM-traded firm said that, alongside its strategic alliance partner Baja Oil and Gas, it had worked “for some time” to identify additional locations where the successful 3D seismic-led approach adopted at Stanley could be repeated and further commercial success obtained.
That business development project would be called ‘Greater Stanley’.
It said the first acquisition of additional acreage was 20% of an existing oil producing lease, ‘Greater Stanley 1’ covering circa 36 acres near the existing Stanley Project, where Mosman has participated in three wells.
Acquisition of that lease would enable the application of the technical work that had been successful at the Stanley wells.
The board said the Greater Stanley 1 lease as currently producing around six barrels of oil per day from two wells completed in the Sparta zone.
It explained that the key benefit of the acquisition was the potential to apply the technical work successful at the Stanley wells, to increase production from the lease.
That could include re-entry and re-completion of one or both of the existing wells, or the drilling of new wells.
Mosman said the terms had been agreed, and the transaction remained subject to completion and registration.
The second acquisition was an adjacent lease of around 35 acres, with no wells, being ‘Greater Stanley 2’.
That area was being leased directly from landowners.
Baja had been managing the acquisition process, and Mosman said it expected to acquire at least a 25% working interest in that lease as part of the process.
The next step for the Greater Stanley Area was for detailed technical work to take place, to determine the way forward, which could include drilling a well later in 2020.
Mosman said the total cost to the company of the two acquisitions was around $30,000, adding that its strategic partner Baja was also acquiring an interest in both acquisitions, and would become the operator of both leases.
Neither acquisition currently had any associated reserves or resources attributable to them, and both remained subject to agreeing final documentation and associated conditions precedent, with the cost being funded out of the company's existing cash resources.
At Stanley-4, Mosman added that it has been advised that site preparation work was continuing.
It said the decision had been made to upgrade the access road to the site, and as a result, Stanley-4 was now expected to be drilled in March.
“Mosman is pleased to provide tangible evidence of the benefit of its investment in business development work with Baja to increase Mosman's interests in Texas,” said chairman John Barr.
“The Greater Stanley area will enable additional activity aimed at increasing production.”
At 1536 GMT, shares in Mosman Oil and Gas were down 17.1% at 0.12p.