StockMarketWire.com - Mosman Oil and Gas has provided an update regarding its US operations. These include the Welch Permian Basin Project and Strawn, both located in Texas, as well as the Arkoma Stacked Pay Project, located in Oklahoma.

Welch Permian Basin:

Mosman commenced well workovers and a production optimisation process in late October. Seven wells have now been worked over to replace worn downhole equipment and re-establish production. This work has seen a significant short-term increase in production, however failure of some well rods and flowlines that require repairs have reduced production. Future work will be measured to find an optimal level of the cost of further investment and repairs compared to additional oil revenue, and this will establish the commercially optimal level of production.

This month it is planned to replace well rods and a flowline that is in need of repair.

Oil sales for November 2017 were 689 barrels (gross) (October 843 barrels gross).

Strawn:

A second stage of workovers has been completed, as well as routine repairs. Production, however, has not stabilised at a desired level and the owners are considering options for the asset including possible further investment or alternatively a strategy of reducing costs to focus on cash generation.

Oil sales in November 2017 were 345 barrels (gross) of which 50% is attributable to Mosman. (October 513 barrels gross).

Arkoma:

As previously announced two Directors met Moyes & Co. and representatives of the Arkoma vendors last month, as well as conducting other activities including meetings with banks to discuss potential debt facilities. Those banking discussions remain ongoing.

As a result of meeting with Moyes and the vendors; Mosman agreed to fund $125,000 of additional testing operations and the vendors agreed to extend the First Option date to February 2018 so that Reserve estimates can include the additional information. Full details of this have been previously announced.

The $125,000 has been paid and the additional test work has now commenced.

The Arkoma Project has the potential to add both additional production and Reserves and Resources, however Mosman will only exercise the option if it is fully satisfied with the test work, the Moyes Reserve Report and that the investment meets the Mosman commercial criteria.

John W Barr, Chairman, said: "We are pleased to achieve progress on our stated goals in 2017. The strategy of acquiring oil production when oil prices were low appears to be sound with the recent increase in oil price. Rejuvenating the two older oil fields continues to be work in progress, and we are continuing to gather information and adjusting plans accordingly.

"The strategy of taking an option at Arkoma remains sound. The multi-reservoir resource and production rates required time to be determined and the value is linked to those matters and the change in oil price."



At 2:27pm: [LON:MSMN] Mosman Oil And Gas Ltd share price was -0.08p at 0.75p



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