Mosman Oil and Gas Ltd (LON:MSMN) told investors it has now identified additional near-term production opportunities in Texas following the start-up of the Cinnabar well into production.
The company said that following the successful drilling of the Cinnabar development well it will turn its attention to a pair of older wells already on the Cinnabar lease - referred to as Arco Fee G1 and G2. They were originally drilled in the 1980s and both are said to have produced significant oil and some gas.
Mosman added that it sees low-cost opportunities to tap into the wells – including workovers and/or stimulation in existing zones, and/or, recompletion into deeper ‘Wilcox’ zones.
The company said that detailed desktop work will be required and is now underway, before any field operations begin.
Meanwhile, Mosman noted that it intends to update investors with production rates from the new Cinnabar well, and, that production data will in due course be used to update an independent reserves report for the Cinnabar property reflecting the company's progress with the property.
"The Cinnabar development well has the potential to more than double existing net production and could potentially be transformational for Mosman, as it should be possible to drill several more wells at 40-acre spacing across its acreage to boost its group production and cash flow in the near-term," analysts at SP Angel, the company's broker, said in a note.
The AIM-quoted oil and gas firm holds a 75% working interest in the Cinnabar lease via its wholly owned subsidiary Mosman Operating LLC.