Earthstone Energy will acquire oil well operations sites in Texas. US Credit: Roy Luck.

Mosman Oil and Gas has agreed to acquire two assets in East Texas, US, as part of a strategic alliance with Baja Oil and Gas.

Under the terms of the deal, Mosman will buy a 60% working interest in the Champion project and a 16% working interest in the Challenger project in exchange for $108,000 and $43,500, respectively.

The 240-acre Champion project has several drilling locations and will be operated by Baja, which will retain a 40% stake.

“Given the significant results at Stanley-1, we have determined to prioritise existing resources towards the projects that hold the most chance of further increasing production and cash flows.”

Comprising a lease held by production (HBP) with two production wells in the Wilcox, the 352-acre Challenger project is estimated to have total proved and probable reserves of 849,000 barrels of oil equivalent.

As part of the strategic alliance, Mosman will have a 50% interest in all existing and new projects of Baja.

In July, the companies signed the alliance deal under which Mosman agreed to participate in the development of the Stanley-1 well in east Texas, which is now producing.

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Mosman and Baja will together invest in the development of existing projects and explore additional investment opportunities in Texas.

Mosman Oil and Gas chairman John Barr said: “Given the significant results at Stanley-1, we have determined to prioritise existing resources towards the projects that hold the most chance of further increasing production and cash flows, which includes the potential Stanley-2 well, and the Champion and Challenger projects.”

The company noted that 3D seismic will be used at the Challenger project to identify development well locations within the existing lease area.

The partners expect to drill Stanley-2, which is a follow-up well, in the next few months.