Mosman Oil and Gas Limited (LON:MSMN) has increased its interest in the Winters lease in Polk Country, East Texas.
The oil and gas group acquired a 23% interest in the Winters lease as part of its recent purchase of Nadsoilco, which is the operator.
Mosman has now agreed to farm-in to acquire an additional 6% working interest in the Winters lease.
The key terms are payment of US$12,000 for past costs, and Mosman to pay 8% of the next well costs.
This will increase Mosman’s interest in the lease (including the Winters-1 well) from c23% to c29% (before royalties).
Nadsoilco is now preparing to drill the Winters-2 well, in which it will have a 23% working interest in this well.
The well will be drilled as soon as site preparation has been completed, and the drilling rig is available, with a budget of US$600,000.
Funding of the farm-in and the drilling costs of US$150,000 will be from existing cash resources. Mosman added.
A positive drill result, in line with an existing adjacent well that is producing at around 190bopd (barrels daily) should result in the well costs being recovered from production this calendar year.