REG - Mosman Oil & Gas Ltd - Sproule - Sagebrush Is a Flagship Helium Project

Mosman Oil and GasAnnouncement

18/09/2025 11:00

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RNS Number : 8946Z  Mosman Oil and Gas Limited  18 September 2025

18 September 2025

 

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

 

Sproule ERCE Confirms Sagebrush as a Flagship Helium Project with Significant Commercial Upside

Mosman Oil and Gas Limited (AIM: MSMN), advancing helium, hydrogen and
hydrocarbon projects in the USA, is pleased to announce receipt of the
independent resource evaluation for the Sagebrush Project in Colorado, where
Mosman holds an 82.5% working interest via its Mosman Helium subsidiary. The
report ("Sagebrush Resource Evaluation Report", dated 18 September 2025 and
prepared by Sproule ERCE) confirms Sagebrush as a technically credible helium
and natural gas project with substantial commercial potential.

Highlights

·      Sproule ERCE confirms Sagebrush as a technically credible helium
and natural gas resource under SPE PRMS Standard (*).

·      2U helium gross prospective resources of 134 MMscf (potential
gross value of ~$40 million at $300/Mcf), with upside 3U of 269 MMscf (~$80
million).

·      588-acre four-way structural closure identified, with additional
upside in the overlying Ismay and deeper Leadville sections.

·      Independent verification materially strengthens Mosman's standing
among AIM-listed helium peers and underpins the investment case.

Sproule ERCE Report

A summary of the independent resource volumes certified by Sproule ERCE is set
out below.

Table 1: Summary of Gross Raw Gas Resource Volumes (MMscf)
                  1U     2U     3U
 Total Gas        2,906  4,842  9,760
 Hydrocarbon Gas  661    1,101  2,218
 Helium           80     134    269
 CO₂              1,161  1,964  3,899

 

Source: Sproule Sagebrush Resource Evaluation Report

Sproule ERCE's independent evaluation reviewed the Four Corners Helium (FCH)
report, dated 5 May 2025, petrophysical analysis, and seismic mapping of the
Sagebrush-1 well.

 

 

Key outcomes:

·      Gross 1U of 80 MMscf helium, 2U of 134 MMscf, and 3U of 269
MMscf.

·      Gas composition confirmed helium content of 2.76%, with ~19.5%
methane and ~3% heavier hydrocarbons.

·      Additional hydrocarbon resource gross volumes have a potential
value estimated between $3-10 million, with greater upside possible through
power generation use.

·      Untested deeper Leadville intervals showed hydrocarbon
indications, providing further upside.

Table 2: Summary of Net 1U (Conservative) Gas Resource Volumes to
Mosman's Working Interest After Royalty

                      Hydrocarbons  Helium
 Gross                661           80
 Less 16.67% Royalty  110           13
 Net of Royalty       551           67
 Mosman 82.5% (net)   455           55

Source; Mosman internal calculations

Table 3: Summary of Net 2U (Best Estimate) Gas Resource Volumes to
Mosman's Working Interest After Royalty

                      Hydrocarbons  Helium
 Gross                1101          134
 Less 16.67% Royalty  184           22
 Net of Royalty       917           112
 Mosman 82.5% (net)   757           92

Source; Mosman internal calculations

Table 4: Summary of Net 3U (Upside Case) Gas Resource Volumes to
Mosman's Working Interest After Royalty

                      Hydrocarbons  Helium
 Gross                2218          269
 Less 16.67% Royalty  370           45
 Net of Royalty       1848          224
 Mosman 82.5% (net)   1525          185

Source; Mosman internal calculations

Selected Quotes From The Report

"The Leadville Formation has become a premier helium target in North America,
with recent discoveries demonstrating exceptional helium concentrations that
far exceed typical commercial thresholds."

"The structure is a robust basement high, confirmed by several vintages of
tightly spaced swath 2D seismic lines and reprocessed seismic data. There is a
well-defined, fault-enhanced four-way closure at the Top Leadville horizon
covering 588 acres. Seismic data indicate a possible dual target with the
overlying Ismay Formation which warrants future evaluation."

"The Sagebrush-1 Leadville Formation represents a technically credible helium
and natural gas resource with sufficient potential to justify further
investment in production testing and advanced seismic and petrophysical
analysis."

"Sproule ERCE reviewed the FCH initial report on the Sagebrush Helium Prospect
and found that it meets acceptable industry standards for a HIGH CASE
deterministic evaluation of the prospect."

Next Steps

·      Acquisition of high-resolution 3D seismic (~16 square miles)
scheduled to commence in October 2025. The survey will provide a much clearer
picture of subsurface structures, refine the Sagebrush Leadville closure, and
identify additional prospects across both Sagebrush and Coyote Wash.

·      Extended flow testing of Sagebrush-1, with acid stimulation to
enhance productivity (Q4 2025).

·      Progress evaluation of the combined Leadville/Ismay potential.

·      Advance surface facilities planning, including assessment of
pipeline and processing options.

Porosity

In May 2025, Mosman released its internal estimate of contingent resources for
Sagebrush, which indicated a higher best estimate of helium volumes (C2 of 305
MMscf gross, 205 MMscf net to Mosman). The subsequent Sproule ERCE audit has
applied more conservative technical parameters, resulting in lower prospective
figures.

The main difference is porosity. Mosman's internal analysis utilised an 8%
porosity value, supported by in-house petrophysics and core data from analogue
Leadville wells. Sproule ERCE applied a more conservative 4.6% "most likely"
porosity, which has the effect of reducing calculated volumes. The Company
believes this approach understates the contribution from dolomite intervals,
vugs and fractures observed in other producing Leadville reservoirs.

While Sproule's conservative stance is in line with their reputation as a
leading independent auditor, Mosman remains confident that real reservoir
performance will prove stronger. The Company therefore regards the Sproule 2U
case of 134 MMscf helium as a baseline from which to build and sees material
potential to achieve or exceed these figures as production testing and 3D
seismic data are integrated.

Commercial Perspective

At current helium prices, the 2U gross case equates to a potential purified
liquid helium value of ~$40 million at $300/Mcf, with the 3U outcome
approaching ~$80 million. Methane and other hydrocarbons provide additional
direct sales value of $3-10 million, but their potential for power generation
may significantly exceed this.

The potential restart of the Lisbon Valley helium plant nearby could
materially lower capital costs and accelerate commercialisation.

Importance of Independent Validation

Third-party resource audits provide critical assurance to investors and
regulators. This validation from Sproule ERCE - a globally recognised resource
auditor - materially strengthens Mosman's investment case.

Howard McLaughlin, Interim CEO of Mosman, commented: "This independent
validation by Sproule ERCE is a very significant milestone for Mosman.
Sagebrush is now confirmed as both technically credible and commercially
attractive. While Sproule has applied conservative assumptions, we believe
real reservoir performance will exceed the 2U outcome, consistent with
producing Leadville reservoirs. With 3D seismic set to begin and extended flow
testing later this year, Mosman is building strong momentum toward unlocking
Sagebrush as a flagship development."

Sagebrush Project

The Sagebrush-1 well was drilled in 1993 to a depth of 7,467 feet, targeting
the Leadville and Ismay formations. While the Ismay zone went on to produce
more than 300,000 barrels of oil, a drill stem test in the Leadville flowed
gas containing 2.76% helium, ~19.5% methane and heavier hydrocarbons. Wireline
logs confirmed up to 94 feet of net gas pay.

The DST shut-in pressure continued to build at the end of the test, suggesting
higher flow rates could be achieved with modern completion techniques. The
well was cased and remains available for re-entry and further testing,
providing Mosman with a significant time and cost advantage in advancing the
project.

The historical data from 1993 has been independently reviewed by Sproule ERCE
and is considered reliable for resource assessment purposes.

Qualified Person Statement

The information contained in this announcement has been reviewed and approved
by Jeff Aldrich, Principal Geoscientist P.G., L.P.G, Sproule ERCE. Certified
Petroleum Geologist (CPG), American Association of Petroleum Geologists (AAPG)

Note: (*) Resources have been estimated by Sproule ERCE using the reserve and
resource estimation guidelines outlined by the Petroleum Resources Management
System (PRMS), as revised June 2018.  Helium and Carbon Dioxide gas has been
evaluated as a non-hydrocarbon gases using the principles of the SPE PRMS as
allowed by the SPE August 2022 statement on the "Extension of PRMS Principles
to Non-Hydrocarbon/Non-Traditional Situations".

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.

Glossary

 Term                   Definition
 1U / Low Estimate      At least a 90% probability that the quantities recovered will equal or exceed
                        this estimate.
 2U / Best Estimate     At least a 50% probability that the quantities recovered will equal or exceed
                        this estimate. Often considered the "most likely" case.
 3U / High Estimate     At least a 10% probability that the quantities recovered will equal or exceed
                        this estimate. Represents upside potential.
 Contingent Resource    Those quantities of petroleum estimated, as of a given date, to be potentially
                        recoverable from known accumulations by application of development projects,
                        but which are not currently considered to be commercially recoverable owing to
                        one or more contingencies.
 DST (Drill Stem Test)  A temporary well test conducted to determine the presence and productivity of
                        hydrocarbons or helium in a formation.
 MMscf                  Million standard cubic feet of gas, measured at standard conditions of
                        temperature and pressure.
 Mscf                   Thousand standard cubic feet of gas, measured at standard conditions of
                        temperature and pressure.
 Porosity               The percentage of pore volume or void space, or that volume within rock that
                        can contain fluids. Porosity can be generated by the development of fractures,
                        in which case it is called fracture porosity. Effective porosity is the
                        interconnected pore volume in a rock that contributes to fluid flow in a
                        reservoir. It excludes isolated pores. Total porosity is the total void space
                        in the rock whether or not it contributes to fluid flow. Thus, effective
                        porosity is typically less than total porosity.
 PRMS                   Petroleum Resources Management System, the globally recognized framework
                        issued by the Society of Petroleum Engineers (SPE) and partners, used for
                        classifying petroleum and non-hydrocarbon resources.
 Prospective Resource   Those quantities of petroleum estimated, as of a given date, to be potentially
                        recoverable from undiscovered accumulations by application of future
                        development projects.

 

 

Enquiries:

 Mosman Oil & Gas Limited      NOMAD and Joint Broker

 Carl Dumbrell                 SP Angel Corporate Finance LLP

 Chairman                      Stuart Gledhill / Richard Hail / Adam Cowl

                               +44 (0) 20 3470 0470
 Brand Communications          Joint Broker

 Alan Green                    CMC Markets UK Plc

 Tel: +44 (0) 7976 431608      Douglas Crippen

                               +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 royalty interests in Australia.

 

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