REG - Mosman Oil & Gas - EP-145 Update

Mosman Oil and GasAnnouncement

15/10/2024 09:45

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RNS Number : 2308I  Mosman Oil and Gas Limited  15 October 2024

15 October 2024

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

EP-145 Update

Acquisition of 75% interest and Operatorship

 

Mosman Oil and Gas Limited (AIM: MSMN) the helium, hydrogen and
hydrocarbon exploration, development and production company, has reached
agreement to acquire Greenvale Energy Ltd's (ASX:GRV) ("Greenvale") 75%
interest in EP-145, subject to normal conditions including government approval
("Acquisition").The consideration payable is AU$250,000 (including the
acquisition of seismic long lead items acquired by Greenvale worth
approximately AU$122,000) and will result in Mosman holding a 100% interest
and operational control of EP-145.

 

 

EP-145 Prospective Resources

 Prospective Resources (Bcf)  Low Estimate  Best Estimate  High Estimate
 Total Gas                    12            440            2,290
 Helium                       0.3           26.4           229
 Hydrogen                     0.24          26.4           275

 

Source: Mosman estimates October 2022 to the SPE PRMS Standard

 

Mosman focus on helium

 

In June 2024, Mosman announced a strategic first-move into helium in the USA
with a 20% interest in the Vecta Helium Project in Colorado where five
drilling locations identified and approvals in place. Mosman also committed to
a wider growth strategy through a focus on pursuing helium acquisition and
development opportunities in what is seen as a rapidly growing market which is
experiencing severe supply shortages and strong demand growth and pricing. The
Company has also been actively progressing business development opportunities
in the USA that fit its search criteria of proven high helium concentrations
and is currently assessing and negotiating a short list of helium acquisition
and farm-in opportunities.

 

Given Mosman's extensive technical knowledge of the Amadeus Basin, it sees
increasingly significant value in the EP-145 permit, enhanced as a result of
higher helium prices and the recent higher gas prices in the Northern
Territory. The value of the permit has been further enhanced with the recently
elected pro-business, pro-gas government. Approvals required to acquire
seismic have been submitted to the Northern Territory government.

 

With a stronger balance sheet, Mosman now has the cash resources to meet the
current Permit Year Work Program (including seismic acquisition and
processing) commitments on EP-145 as well as continuing to grow its existing
helium business in the USA that it expects will be further expanded by a
number of acquisition opportunities it is currently evaluating.

EP-145

 

The permit contains a significant anticline (named West Walker), over 30km in
length, which hosts Ordovician through to Neoproterozoic stratigraphy with
prospective targets at multiple levels of over 30km in length. The
significance of the geology is its proximity to the nearby Mereenie oil and
gas field, which produce from the Ordovician Pacoota Sandstone unit.

 

Two wells have been drilled on the anticline, the first West Walker-1 tested
the western end of the feature. The well was drilled on a sparse seismic grid
in 1982 and flowed wet gas to surface at a rate of 3.5MMscf/d from the Pacoota
Sandstone, the main producing reservoir in the Mereenie and Palm Valley
Fields. A follow up well, Tent Hill-1 (1984), was drilled to the southeast on
the same anticline, oil was observed seeping from cores but the well was not
tested. Reprocessing of the vintage seismic data shows that both wells were
drilled off structure, West Walker-1 drilled downdip of the main closure and
Tent Hill-1 did not penetrate the target sandstone within closure.

 

As part of Mosman's initial technical evaluation SRK Consulting (Australia)
were contracted to produce an independent report ("SRK Report, 2015") into the
prospective resources contained in permit EP145. The report highlights the
potential for both conventional oil and gas resources in proven reservoirs
within the West Walker Anticline and unconventional gas resources in the Horn
Valley Siltstone. More recent technical work by Mosman and Geognostics,
Australia has highlighted the potential for helium and hydrogen in addition to
the hydrocarbon resources documented by SRK.

 

Background to the Acquisition

 

In October 2023, Mosman signed a Farmin Agreement whereby Greenvale earnt a
75% interest in EP-145 in exchange for payment of AU$160,000, committing it to
fund both the Permit Year Three work program including seismic (estimated to
be approximately AU$2m) and the Permit Year Four work program, including
drilling one well with a cost cap of AU$5.5m.

 

More recently, Greenvale announced a refocussing of its strategy to uranium
exploration. Mosman has seized the opportunity to acquire its 75% to move to
100% interest.

 

Prior to the Acquisition, Mosman's interest in EP-145 had a carrying value in
Mosman's consolidated accounts of AU$1.49 million (100%) as at 31 December
2023. Based on the carrying value at 31 December 2023, the value of the assets
being acquired are approximately AU$1.12m. Exploration costs to date have been
capitalised and there are no historic profits or losses attributable to
EP-145.

 

Andy Carroll, Chief Executive Officer of Mosman, said: "We are pleased to have
100% ownership and operational control of EP-145, a project that the Mosman's
technical team knows extremely well and has been involved with over a number
of years. The permit is now ever more commercially compelling with increased
value of proven hydrocarbons that would be co-produced along with the high
value helium.

 

"Recent seismic acquired nearby has confirmed the ability of seismic to define
the exploration targets on the Central Ridge (which includes the Mereenie oil
and gas field) that extends in to EP-145.

 

"The gas shortfall currently evident in the Northern Territory and in the
major markets of the East Coast, coupled with the increasing spare production
capacity in nearby gas plants at Mereenie and Palm Valley, offers development
opportunities for future gas projects in the Amadeus Basin like EP-145.
Readily available infrastructure includes gas processing facilities, gas
pipelines to Darwin, where there is a helium plant, and major gas transmission
systems to markets in Eastern Australia.

 

"Mosman has a clear business strategy to expand and deliver on a portfolio of
helium exploration projects in Australia and USA which are experiencing strong
demand growth and escalating pricing."

 

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                                                         SP Angel Corporate Finance LLP

 CEO                                                                  Stuart Gledhill / Richard Hail / Adam Cowl

 acarroll@mosmanoilandgas.com (mailto:acarroll@mosmanoilandgas.com)   +44 (0) 20 3470 0470

 Alma                                                                 Joint Broker

 Justine James / Will Merison                                         CMC Markets UK Plc

 +44 (0) 20 3405 0205                                                 Douglas Crippen

 mosman@almastrategic.com (mailto:mosman@almapr.co.uk)                +44 (0) 020 3003 8632

 

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 a helium, hydrogen and hydrocarbon 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. The Company has several projects in
the US, in addition to exploration projects in the Amadeus Basin in Central
Australia.

 

 

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