Mosman Oil and Gas acquires Pine Mills oil field

Mosman Oil and Gas have entered into an agreement to acquire an 80% interest in the Pine Mills oil field in Texas and its operating company Buccaneer Operating LLC.

The oil and gas exploration company’s operations are usually focused in Australia and New Zealand.

The deal, orchestrated through its newly formed US subsidiary, with a subsidiary of Cue energy resources will also include 12 acres of freehold land and a workover rig.

The asset will be acquired for $975,000 (£0.79m), which the company plans to finance from its existing cash resources. After the deal is complete the group will have cash at bank and investments totalling AUD2m (£1.2m).

Since it was discovered in the 1950's the Pine Mills field has produced over 12m barrels of oil, with its current daily gross production averaging at over 100 barrels of oil per day (bopd).

The group has identified the potential to increase production in the near term through the reactivation of existing inactive wells and the installation of submersible pumps. Further upside potential can be achieved through application of seismic acquisition and infill drilling.

Chairman John Barr said: "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. Our strategy in the near term is to focus on increasing production and capturing the upside we see in the Pine Mills oil field.”

The share price rose 128.80% to 1.43p at 1133 GMT on Wednesday.