Mosman Oil and Gas Limited, the oil exploration, development and production company, has increased its interest in the Challenger Project.
In 2018, Mosman acquired a 16% interest in the 352-acre production lease called the Challenger Project, situated in East Texas. This lease is Held By Production ("HBP") with two production wells in the Wilcox formation, with nominal periodic oil production. The project now includes 3D seismic data and associated technical work performed by Mosman's strategic partner Baja Oil and Gas LLC ("Baja").
After a period of review and negotiation, Mosman has acquired an additional 30.83% working interest in the Project, for a cash consideration of USD 35,760, increasing Mosman's ownership from 16% to 46.83%. Following the acquisition, Mosman will become Operator of the Project, in two equal installments, the first of which has been paid with the balance due in 90 days.
As previously advised in Mosman's RNS dated 24 September 2018, there is an existing Reserve Report on the Project dated June 2017 that conforms to SPE-PRMS standards where proven plus probable reserves of 849,000 barrels of oil equivalent gross have been assigned to the Project. The royalties on the lease are circa 25%.
Since the original acquisition, Mosman and Baja have acquired 3D seismic data and continued technical and other work on the Project with the objective of identifying drilling locations and drilling the first new well on the Project in 2019. Mosman's acquisition of an increased interest is a demonstration of the Mosman's Board's confidence in the Project.
John W Barr, Chairman, said: "Mosman maintains its objective of increasing production from its projects, and continues to progress several projects within its portfolio. The technical work completed on the Challenger Project is encouraging. We are pleased to increase our ownership of the production lease in this proven producing area.
"The next step for Challenger is to make final technical decisions on the wells to be drilled and then consider the various funding alternatives that are available."
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