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In June 2008, Mosaic Oil outperformed July 2008 production target when it reached a net daily production of over 1500 BOEPD. With a successful drilling campaign underway, the Company is set to deliver a strong financial and operational performance for shareholders in 2009 Financial Year as well. In fact, Mosaic Oil is on track to achieve an increased revenue target of $32 million for FY2009. The controlled stabilised production rates of the recent successful wells, Waggamba-4H and Taylor-18, implies that, on a trouble-free basis and assuming typical natural production decline, the Company can reasonably expect the contribution from these two wells alone to be at least $11 million to the Company’s FY2009 sales revenue. With over $23 million cash balance and increasing cashflow to fund the planned continuous drilling programs in the 2008 to 2010 period, Mosaic Oil is also well positioned to implement the Company’s accelerated growth strategy. The Company has already launched the 2008 program with a number of successful target wells, and following this initial success has increased the 2008 drilling Program to planned 12 wells from originally planned 10 wells. (The additional wells are Waggamba-6H and Waggamba-7H horizontal wells). Mosaic Oil will continue to focus on the lower risk liquids rich gas and oil development wells for increasing production output and cashflow from the discovered probable reserves in the region. Any additional production and the cash flow generated will position the Company well for its accelerated growth strategy for the next two to three years. Mosaic Oil now has immediate plans to target 12 wells for 2008, and at least 10 wells per year over the following two years, during which time the Company will undertake a total drilling, seismic and development program in the Surat-Bowen Basin estimated at $35-40 million. |
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