Mosman Oil and Gas Limited (LON:MSMN) shares surged in early deals as the company dangled the prospect of becoming cash-flow positive.
In the year to the end of June, the company saw revenue rise to US$1.11mln from US$740,853 the previous year but this only tells half the story as two of its wells (Stanley 1 & 2) only commenced production this year while Stanley-3 has come on stream in the current financial year – i.e. since June.
As a result, the board believes becoming cash flow positive on a company level is “an increasingly achievable objective”.
Loss before tax narrowed considerably to US$1.21mln from US$4.10mln the year before.
Cash and cash equivalents at the end of the financial year stood at US$823,959, compared to US$1.32mln a year earlier.
Net production attributable to Mosman during the year was 18,216 barrels of oil equivalent, compared to 10,367 in 2018, representing an increase of 76%.
“The board fully appreciates shareholder disappointment with the share price,” the chairman, John Barr, assured shareholders.
“Two of the company executive directors are heavily invested in Mosman and are also cognisant of the underperformance of the share price. Our aim is to continue to deliver growth through developing our current projects and further acquisitions, and we look forward to our achievements being more realistically reflected in the share price,” he added,
“Mosman's focus remains delivering on its strategic objective. We have made considerable progress in acquiring projects and building production however this is only the start of this next phase of growth and we remain focussed on sustainable production and identifying projects that meet our strict criteria,” Barr concluded.
Shares in Mosman were up 4.4% at 0.24p in early deals.