REG - Mosman Oil & Gas - EP 145 Funding by Farmin Agreement

Mosman Oil and GasAnnouncement

16/10/2023 10:45

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RNS Number : 2392Q  Mosman Oil and Gas Limited  16 October 2023

16 October 2023

 

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

EP 145 Funding by Farmin Agreement

 

Mosman Oil and Gas Limited (AIM: MSMN) the hydrocarbon, helium and hydrogen
exploration, development and production company, has signed a farmin
 agreement with Greenvale Gold Pty Ltd ("Greenvale") a wholly owned
subsidiary of Greenvale Energy Ltd (ASX:GRV) to fund seismic and drilling on
its EP 145 project in the Northern Territory of Australia.

 

Upon Completion, Mosman will retain a 25% working interest in EP 145 and
Greenvale will earn a 75% working interest in EP 145 by:

 

·      Committing to pay AUD160,000 in cash within 5 days of Completion

·   Paying for the EP 145 Permit Year 3 Work Program, including seismic,
effective from Completion Date

·      Funding the Permit Year 4 Work Program, including drilling one
well with a well cost cap of AUD5.5 million

·     The Year 3 Work Program is to be completed by August 2024 and the
cost of the seismic acquisition is estimated to be circa AUD2 million

·     The Year 4 Work Program is to be completed by August 2025. The
cost of drilling a well depends on many factors including the depth of a well
and cost of drilling rigs at the time of drilling

 

Mosman has identified a drilling target at 1500m and estimates the cost of
drilling that well to be in the order of AUD5m. However, the final location
and well design is subject to seismic results, joint venture discussions and
NT government approval. Costs of the well over AUD5.5 million and any other
costs will be shared Greenvale 75% and Mosman 25%.

 

The Farmin Agreement Completion is subject to NT government approval of the
transfer of interest and Greenvale becoming Operator. If these approvals are
not met by 30 January 2024, either party may terminate the Farmin Agreement.

 

EP 145 has potential for hydrocarbons, helium and hydrogen. The Prospective
Resource was announced on 24 October 2022 with "Best Estimate" per SPE PRMS of
440 Billion cubic feet ("Bcf") Total Gas, including 26 Bcf of Helium and 26
Bcf of Hydrogen.

 

EP 145 had a carrying value in Mosman's consolidated accounts of AUD1.29
million as at 31 December 2022. Exploration costs to date have been
capitalised and there are no historic profits or losses attributable to EP
145. The AUD160,000 proceeds due to Mosman will be utilised for general
corporate purposes.

 

As part of the Corporate Review, Mosman evaluated various options with regard
to funding the exploration program at EP 145. This farmin is considered the
best alternative as it contracts out the funding for Permit Year 3 without the
need for Mosman to raise additional capital for such purposes. The agreement
also includes up to AUD5.5 million funding for the Year 4 Work Program
including well drilling costs. The alternative of funding EP 145 with a "spin
out" IPO would have required Mosman funding of the significant IPO costs,
would depend on capital markets at the time of IPO, and would have resulted in
additional ongoing corporate costs. The IPO was not certain of success and may
not have raised the funds in the limited time available to ensure funding the
seismic that requires commitment to long lead items in 2023.

Andy Carroll, CEO, commented: "We are pleased to have reached agreement with
Greenvale who we see as a strong Joint Venture partner to work with in
Australia. This agreement delivers on funding exploration and is validation of
the helium, hydrogen and hydrocarbon potential of EP 145."

 

 

About Greenvale

Greenvale is listed on the ASX in Australia and has a market capitalisation of
over AUD$30 million. The Chairman is Neil Biddle, who founded Pilbara Minerals
that now has a market capitalisation of over $13 billion. Greenvale has a
large bitumen resource in Queensland and geothermal projects.

 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this information is
now considered to be in the public domain.

 

Enquiries:

 

 Mosman Oil & Gas Limited                           NOMAD and Joint Broker

 Andy Carroll, CEO acarroll@mosmanoilandgas.com     SP Angel Corporate Finance LLP
 (mailto:acarroll@mosmanoilandgas.com)

                                                    Stuart Gledhill / Richard Hail / Adam Cowl

                                                    +44 (0) 20 3470 0470
 Alma                                               Joint Broker

 Justine James                                      CMC Markets UK Plc

 +44 (0) 20 3405 0205                               Douglas Crippen

 +44 (0) 7525 324431                                +44 (0) 020 3003 8632

 mosman@almapr.co.uk (mailto:mosman@almapr.co.uk)

 

Updates on the Company's activities are regularly posted on its website:

www.mosmanoilandgas.com (http://www.mosmanoilandgas.com/)

 

 

Notes to editors

Mosman (AIM: MSMN) is an oil exploration, development, and production company
with projects in the US and Australia. Mosman's strategic objectives remain
consistent: to identify opportunities which will provide operating cash flow
and have development upside, in conjunction with progressing exploration of
its existing exploration permit and permit application. The Company has
several projects in the US. In addition to exploration projects in the Amadeus
Basin in Central Australia.

 

 

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