Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, is pleased to announce Proved Reserves at the Welch Permian Basin Project (“Welch”) in Texas.
· Welch Proved Reserves (1P) of 234,000 barrels oil (gross) with a NPV10% value of USD $2.007 million.
· Included in the Proved Reserves at Welch are incremental Proved Undeveloped Reserves of 102,000 barrels with and NPV10% value of USD $0.597 million for a single proposed horizontal oil well, that represents an encouraging potential development opportunity.
· Welch meets the Company’s stated strategy of delivering operating cash flow and having development upside.
Moyes & Co’s Reserves Report on Welch
Independent expert, Moyes and Co, has reported the Proved Reserves at Welch under the under SPE PRMS definitions to be 234,000 barrels of oil (gross).
The identified incremental Proved Undeveloped Reserves for a horizontal well represent an encouraging development opportunity for Mosman. In parallel with continuing to operate Welch to optimise cash flow, Mosman will progress with the previously announced economic evaluation of a horizontal well development programme in support of a drilling decision in 2018.
Only one horizontal well has been included in the Moyes and Co reserves report at Welch but the Company believes up to three horizontal wells may be possible. A final decision by the Board on a horizontal well is subject to completion of the Company’s economic evaluation, a development plan, permitting, prevailing economic conditions and funding alternatives.
Summary details of the Proved Reserves at Welch are as follows:
i. Source: Moyes & Co Reserves Report on the Welch Project dated 17 April 2018
ii. Operator: Mosman Oil and Gas Limited
iii. Company’s Working Interest: 100%
iv. NPV10%: Uses a USD $65 per barrel flat WTI oil price assumption and unescalated gas price of $2.80 per MMBTU. The potential economic value of the above Reserves will, in part, depend on the Company’s chosen field development plan and operating strategy which is currently being evaluated.
v. The estimates of proved reserves and future revenue in this report have been prepared in accordance with the SPE/WPC/SPEE PRMS guidelines.
Moyes & Co’s Reserves Report on Welch will shortly be available on the Company’s website.
John W Barr, Chairman, said: “Welch meets the stated strategy of delivering operating cash flow and having development upside.
“We are pleased to achieve this milestone of Proved Reserves that underpins our view that Welch was a sound acquisition, at the right time, and where we have added value in less than 12 months. Importantly, the Proved Reserves identified at Welch should provide a basis for being able to obtain bank debt to assist in funding further production growth. Looking forward at Welch, we continue to evaluate horizontal wells with the objective of having a development plan to put before the Board later in 2018.”
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned