Steadfast Energy and Silver Dollar Acquire Mosman's Welch Project in Texas
Steadfast Energy Partners LLC and Silver Dollar Energy Investments LLC have entered into a binding contract to jointly acquire a 100% interest in and operatorship of the Welch Project in West Texas from LSE-listed Mosman Oil & Gas Ltd., for a total cash consideration of US$420,000. Upon completion, Steadfast and Silver Dollar will each hold a 50% interest in the project.
In May last year, Mosman had entered into an agreement with Eagle Natural Resources LLC for the sale of its 100% interest in the Welch Project for a total consideration of US$300,000. Subsequently in July, Mosman disclosed that the remaining consideration for the sale was not received by the due date and as a result, the transaction was terminated.
The Welch Project includes six leases covering an area of 653 acres in the Permian basin in Dawson County, Texas. The acreage is 100% held by production, and includes 10 producing wells, 10 shut-in wells, and seven injector wells and production equipment and facilities. The project is a small part of the larger Welch oil field, which was discovered in 1941 and has produced in excess of 170 million barrels (MMbbls) of oil till date. The project is reported to hold proved (1P) reserves of around 182 thousand barrels (Mbbls) of oil as of April 1, 2018, and average daily production of approximately 28.1 barrels of oil per day (bbls/d) in the year ending June 30, 2020.
“We are pleased to have secured a new sale agreement at a 40% premium. Welch was a valuable stepping-stone for Mosman in terms of experience and building a production base in the US while we built a position in East Texas. The sale of Welch will enable management to focus on further development of the projects where we see strong near-term development potential,” stated John W. Barr, Mosman’s Chairman.
Sydney-based Mosman Oil & Gas is engaged in oil & gas projects in the United States and Australia, and also owns a minority stake in the TSX-V listed GEM International Resources Inc.
The transaction is subject to customary closing conditions, and is expected to close on January 15th, 2021.