Mosman shares surge on logging at Cinnabar

24th Oct 2022 15:30

(Sharecast News) - Oil explorer, developer and producer Mosman announced on Monday that the Cinnabar development well in Tyler County, Texas has completed wireline logging, casing has been run and cemented, and operations are now progressing towards production.

The AIM-traded firm said multiple potential production zones were identified on mud logs, and had now been confirmed by wireline logging.

An independent expert log analyst company, Nutech Energy Alliance, estimated 97 feet of net pay in the Wilcox sands.

As with the existing wells in the lease, the company said the Wilcox sands would be put on production sequentially.

Mosman said the initial production zone would be determined by the deepest Wilcox sand being flow tested as a possible production zone.

The well data indicated good sand thickness, porosity and permeability, and positive resistivity indication on wireline logs.

A nearby well had an initial production rate of 196 barrels of oil per day from a sand at similar depth.

Depending on the flow rates achieved, that could become the initial production zone, or the zone could be suspended for later production.

If the deeper Wilcox sands did not produce at a satisfactory flow rate, the intention would be to flow test another Wilcox sand as an alternative initial production zone.

The firm said the well data on the sand indicated good sand thickness, porosity and "excellent" permeability.

A nearby well, in the adjacent lease not owned by Mosman, had an initial production rate of 182 barrels of oil per day, plus associated gas from the sand at similar depth.

Depending on the flow rates achieved, that could become the initial production zone, or the zone could be suspended for later production.

Once a zone was selected for initial production, the other Wilcox sands would be left for future production.

"We now look forward to getting this well on production," said chairman John Barr.

"Our 75% working interest and the performance of nearby wells suggests production from Cinnabar can have a major impact on net production and, at current prices, that would mean a significant increase in both revenue and cash flow.

"The excellent drilling results to date confirms Mosman's technical work and geological model and mean this lease is ripe for the drilling of further development wells."

That, Barr said, provided Mosman with an opportunity for staged organic growth.

"Following the planned production flow tests, the results of this well will be included in the ongoing review and ranking of opportunities and will be key in the identification of additional development wells and to increase production on the lease as Mosman continues to progress its strategic objectives."

At 1506 BST, shares in Mosman Oil and Gas were up 48.77% at 0.1p.

Reporting by Josh White at Sharecast.com.