Mosman Oil & Gas, Cinnabar G1 well workover and start of gas lift

Mosman Oil and Gas Limited (AIM: MSMN), a company engaged in oil exploration, development, and production, has announced that the Arco-Fee G-1 (“G1”) well at Cinnabar has successfully flowed oil after a workover that allowed for gas lift. Mosman holds a 75% working interest in Cinnabar.

Earlier, Mosman had proposed examining the feasibility of workovers at the G1 and Arco-Fee G-2 well (“G2”) to boost production. Following this, Mosman has completed a workover on the G1 well and has been injecting gas from the Cinnabar-1 well (after processing it at the central production facility).

As a result of gas injection, the G1 well has commenced to flow oil and water at initial rates of about 5 barrels of oil per day (bopd). It is noteworthy that the well production rate had declined from over 100 bopd in 1988 to a few barrels per month in 2022. Production of G1 will be optimized by adding gas compression, which necessitates identifying, procuring, and installing a suitable compressor and related facilities. The compression facility will also be designed to compress gas prior to its sale on the nearby gas pipeline. Mosman will finance these items from existing cash reserves and the proceeds of the recent placement.

The Cinnabar Field, situated about 30 miles north of Beaumont, Texas, in Tyler County, was discovered in 1988 by Ballard Exploration’s G-1 well. The well found multiple pay zones in the Wilcox Formation at depths of approximately 9,000 feet to 10,400 feet.

The Wilcox sands in this region were originally deposited in a nearshore deltaic environment. The primary reservoirs in this play are upper Wilcox shelf-edge sandstones intersected by Wilcox growth faults. The sandstones’ porosity ranges up to 26 percent, and permeabilities range up to 600 millidarcies. Traps exist on numerous growth faults and growth fault segments, including fault traps, facies changes along the growth fault, and anticlinal structures within the growth faults. Seals for many of the reservoirs are interbedded mudstones juxtaposed with the sandstones along the faults.

The discovery well, Arco Fee G-1, has produced oil and gas from the 7th Wilcox, 5th Wilcox, 2nd Wilcox, and 1st Wilcox zones. A second well, G2, has similar pay zones. G-1 has produced around 149,000 barrels of oil and 341 million cubic feet of gas to date and is currently producing with gas lift. G2 has produced about 138,000 barrels of oil and 173 million cubic feet of gas and is currently shut in.

In November 2022, the third well, Cinnabar-1, was drilled and is now in production.

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