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LONDON (Alliance News) - Mosman Oil & Gas said on Wednesday that a report carried out at its Arkoma Stack Pay Project in Oklahoma showed "significant" proved and probable reserves at the well.
The total proved and provable reserves found by the Moyes & Co report were 336,000 barrels of oil equivalent. Due to Mosman's 27% interest in the project, the oil explorer gets 64,000 boe reserves.
The reserve's net present value - discounted at 10% of all forecast revenues net of all costs including royalties, capital costs and operating costs - is USD1.2 million net to Mosman. This value is only based on the reserves and not the value of the 2.4 million boe contingent resources found.
Mosman has an option to increase its interest in the Oklahoma projects to 33.3%
Chairman John Barr said: "Arkoma continues to meet the stated strategy of delivering operating cash flow and having development upside.
"It is very encouraging to have proved reserves at this early stage of development. We have now funded the agreed operational upgrades and, in the coming months, will evaluate operational data following the installation and operation of Electric Submersible Pumps (ESPs) planned for May 2018.
"We are also encouraged by an independent expert confirmation of the significant probable reserves and resources that attracted us to this project in the first place. There is a lot of room for growth in this project.
"The reserves report at Arkoma, and subsequent field performance following the ESPs, are necessary data points ahead of the board making a decision of whether it will increase our 27% of Inland's working interest to 33.3% by July 31 2018."
Shares in Mosman were up 1.6% to 0.71 pence each Wednesday midday.