Mosman Oil and Gas Limited (LON:MSMN) has updated investors on progress on the Falcon-1 well and the Stanley project in East Texas, US.
The AIM-listed firm said the Falcon-1 well was re-completed in a new zone last week and can now confirm that the well is producing gas and oil with no reported water.
The flow is intentionally restricted with a 5/64 choke well to monitor performance, Mosman said, adding that the production rate with this choke is around 600 metric million British thermal units (MMBtu) per day (around 105 barrels of oil equivalent per day) and that the well has been operating at this level since June 12.
Whilst the gas and oil production rate is similar to the recent production rate in the lower zone, the company said the profit margin will be greater as operating costs will be reduced due to lower water disposal costs, adding that production from the zone also verifies the wireline log interpretation of multiple hydrocarbon-bearing zones in this well, which in turn will enable an update of the geological model of the lease and the adjacent Galaxie lease.
Meanwhile, Mosman said the operator at the Stanley project, in which it owns a working interest of between 15-19%, has advised that hot oil treatment of the surface pipeline was successful and enabled an increase in gross production from the Stanley-3 well from 40 to 65 barrels of oil per day (bopd).
The firm also said that the operator has advised that the Stanley-4 well will be back on production this week and that a decision has also been made to gravel pack the Stanley-1 well for sand control in order to produce the well without needing workovers to remove sand from the wellbore or pumping equipment. The company said Stanley-1 is also expected to be back on production in the near future.
Shares in Mosman jumped 9.4% to 0.17p in late afternoon trading on Monday.