Key points:
- Mosman Oil & Gas shares surged 28.6% as the Cinnabar well progressed.
- The project has multiple wells that could kick off the initial oil production.
- The company’s Australian project is also making good progress.
The Mosman Oil and Gas Ltd (LON: MSMN) share price surged 28.6% after announcing that its Cinnabar development well in Tyler County, Texas, was progressing towards production. The company noted that it had completed wireline logging and has run casing and cemented the well, making it ready to start production.
The oil exploration, development and production company revealed that it had identified multiple production zones, giving it options for which holes would start producing oil. The company intends to start with the deepest Wilcox sand, where it will conduct a flow test to determine if the well is ready for production.
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If the flow tests indicate that the first well is ready for production, the company expects to produce up to 196* bopd at the site, based on the production of a nearby well operating at a similar depth. However, if the well does not meet production targets during the flow testing, the company will move on to the second well, which has the potential to produce 182* bopd.
Mosman Oil & Gas reassured investors that it has multiple wells ready for flow testing to see which ones shall be the initial production (IP) zone. The company is convinced that the various wells dug at its Cinnabr project will start producing oil soon.
The company also released a prospective resource estimate for its EP 145 100% owned and operated permit in the Northern Territory of Australia, showing that it has the essential ingredients for Helium and Hydrogen prospectivity. The permit area also has significant potential for hydrocarbon exploration and production.
A preliminary analysis done by an independent thor party indicated that the site has the potential to produce viable helium and hydrogen. Some critical factors identified include basement composition as a source of helium, basement structure, and connectivity via faults systems to support entrapment and possible seal facies above the basement.
Investors cheered all the updates, evidenced by Mosman Oil’s shares rally.
*This is not investment advice.
Mosman Oil and Gas share price.
The Mosman Oil & Gas share price surged 28.57% to trade at 0.09p, rising from Friday’s closing price of 0.07p.