“Against a challenging sector backdrop, Mosman has successfully monetised one of its projects.”
Mosman Oil & Gas’s () trading update today underlines management’s focus on maximising production while retaining a prudent approach to capital discipline, said SP Angel.
“Against a challenging sector backdrop, Mosman has successfully monetised one of its projects.
“While the Welch oil field is producing and has development potential, the ranking of projects in the Strategic Review announced earlier this year identified better growth assets at Stanley and Greater Stanley,” said the broker.
The capital from the sale of Welch will facilitate investment in these growth areas, SP Angel added, as well as providing working capital at a time when cash flow is adversely affected by the low oil price.
Earlier, Mosman had highlighted that its business is underpinned by low operating and development costs.
“The board is now considering how best to grow the business over the next year given the improved oil price backdrop,” the company told investors.
Growth opportunities include the Stanley and Greater Stanley areas in Texas which are being prioritised and pursued on the basis of minimising both operating and capital costs.
It noted that the intended sale of the Welch asset, in Texas, for US$300,000 and has received US$60,000 non-refundable deposit. The transaction is slated to complete in July.
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