Business
First Option Exercised at Arkoma
First Option Exercised at Arkoma.
About this update from Quantum Helium Limited
[{"type":"text","content":"\n \nRNS Number : 1927G Mosman Oil and Gas Limited 28 February 2018 \n\n \n28 February 2018\n \nMosman Oil and Gas Limited\n(\"Mosman\" or the \"Company\")\n \n \nMosman Exercises Arkoma First Option\n \nMosman (AIM: MSMN) the oil exploration, development and production company is exercising an amended First Option Agreement (\"Amended First Option\") for the Arkoma Stacked Pay Project (\"Arkoma\" or the \"Project\") in Oklahoma, USA. The Amended First Option delivers significant advantages over the previous arrangement and comes after a lengthy series of negotiations with the vendor, Inland Operating Company Inc. (\"Inland\") and Mosman's strategic alliance partner Blackstone Oil and Gas Limited (\"Blackstone\").\n \nMosman is exercising the Amended First Option for Arkoma as it is an attractive oil acquisition with demonstrated production and medium term development, and fundamentally the Amended First Option meets Mosman's strategic objectives to acquire production with development upside.\n \nMosman has received a draft report from Moyes and Co (\"Moyes\") which has indicated that the project (gross 100%) includes the following:\n \n· The Project has a range of up to 2.5 million boe of recoverable oil and gas, including:\no 346,000 boe 2P (Proved and Probable Reserves);\no 610,000 boe 2C (Contingent Resources); and \n· a 2P Reserves NPV10 of US$4.3 million as of 1 February 2018.\n \nThe immediate plan at Arkoma is the upgrade of production facilities including large volume Electric Submersible Pumps and associated infrastructure. Anticipated gross production rates with the upgraded production facilities are expected to be in the range 80 to 120 bopd.\n \nFurther Transaction details are set out below but key advantages of the Amended First Option include:\n \n• The Amended First Option percentage has been increased from 20% to 30%;\n• Reduced option exercise cost from US$875,000 to US$450,000;\n• Immediate upgrade of production facilities;\n· Inland has agreed to work with Mosman (and Blackstone) to explore and develop the adjacent area where Inland has rights to an existing 56 square mile 3D sei...