Mosman completes prefeasibility study on Welch project in US

Exploration and development company Mosman Oil and Gas has completed the prefeasibility study (PFS) on its Welch Permian Basin project in Texas, US, which indicated ‘attractive economics’ at the current oil price.

The study considered the development potential of drilling horizontal wells in order to increase both reserves and production.

Apart from the PFS, the company also commissioned an independent reserves report, which is set to be based on existing producing vertical wells and potential horizontal development wells.

Based on the results of the PFS, the wells are anticipated to have flow rates of 60bopd to 120bopd per well, taking into consideration nearby well results.

Mosman Oil and Gas chairman John Barr said: “Mosman is very pleased with the results of the PFS at Welch and has instructed the commencement of the feasibility study.

“The Welch project provides both a strong revenue stream and the foundation for growth. The horizontal well development is being systematically progressed and we expect to have several financing alternatives that will be finalised before the final development decision is made by the board.”

Moyes and Co has been selected to prepare the reserves report for the project and it is expected that the report will be delivered by the end of April this year.

In the wake of positive PFS results, Mosman intends to undertake a feasibility study and obtain the required approvals.

The company expects to drill the first horizontal well and thereafter commence production in either the third or fourth quarter of this year, depending on closure of conditions such as financing and permitting.

Located in Dawson County, the project is said to comprise 653 acres of leases with ten producing wells, seven injector wells and ten shut-in wells.