Mosman puts fall in production down to US operational challenges

11th Aug 2023 15:08

(Sharecast News) - Energy explorer, developer and producer Mosman Oil and Gas updated the market on its production for the year ended 30 June on Friday, and on its ongoing developments in the United States.

The AIM-traded firm said net production for the year totalled 31,067 barrels of oil equivalent - a decline from the prior year's figure of 37,915 barrels.

One of the significant reasons behind the dip was the temporary halt in production at the Falcon project due to water ingress.

Despite the challenges at Falcon, Mosman clarified that further investments to address the issues were not a top priority, particularly in light of the current lower gas prices.

The company did report a substantial 73% annual rise in production at its Stanley project, which it attributed to the installation of gas lift and jet pumps at the site.

Looking at its quarterly production, the firm said that for June, the figures were 15,332 barrels of oil equivalent gross, and 5,937 barrels net.

That was a considerable decrease from the March quarter, when production was 28,632 barrels gross and 11,960 barrels net.

Mosman put that decline down to issues at the Cinnabar project and increased sand production challenges at Stanley, which demanded the installation of extra screens and cleanouts.

The firm said it might revisit its strategy by possibly switching back to gas lift for some wells to optimise production.

In terms of future developments, Mosman said efforts were ongoing at the Cinnabar project, where the aim was to enhance production from the three existing wells and to strategise for drilling the next development well, pending necessary funding.

An update on the G-2 well revealed plans for fracture stimulation, which was scheduled for the week of 13 August.

"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 cash flow," said chairman John Barr.

"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."

At 1434 BST, shares in Mosman Oil and Gas were up 5.26% at 0.03p.

Reporting by Josh White for Sharecast.com.