9th Nov 2016 10:21
LONDON (Alliance News) - Mosman Oil & Gas Ltd on Wednesday saw its shares soar after it said it has agreed to acquire an 80% stake in a producing oil asset in the US.
Mosman said it, through its newly-formed Cue Energy Resources Ltd subsidiary, will buy an 80% stake in the Pine Mills oil field in Wood County, Texas. It will pay USD975,000 in cash to acquire the asset.
Mosman shares were up 65% to 1.08 pence on the news.
The field has 15 producing well and gross oil production averaged in excess of 100 barrels per day for the past four months at the site, Mosman said. Pine Mills has proven reserves of 373,000 barrels of oil and the acquisition will include all the equipment and infrastructure needed to operate the field.
"The Pine Mills producing oil field enables us to deliver on our stated objective of generating sustainable cash flows as well as offering near-term development upside potential," said Mosman Chairman John Barr.
"The acquisition is the result of months of work where a number of production projects were examined. This search has been undertaken to balance the existing exploration portfolio which has significant prospective resources by acquiring a production asset with reserves, existing cash flow and near-term development upside potential," Barr added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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