REG - Mosman Oil & Gas - Portfolio Review and Sale of EP-145

Mosman Oil and GasAnnouncement

14/01/2025 10:45

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RNS Number : 2798T  Mosman Oil and Gas Limited  14 January 2025

14 January 2025

 

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

Portfolio Review, Sale of EP-145 to Focus on USA Helium Assets

 

Mosman Oil and Gas Limited (AIM: MSMN) the helium, hydrogen and hydrocarbon
exploration, development and production company, provides an update on its
asset portfolio.

 

As part of its strategic shift to helium exploration, development and
commercialisation, Mosman is continuously reviewing the ranking of each
project and where the team should focus. Subsequent to the acquisition of
Coyote Wash and Sagebrush projects announced in December 2024, a review
determined the best allocation of capital and management efforts is to dispose
of EP-145 for which the Company has signed an agreement with ASX listed
Echelon Resources Limited ("Echelon", ASX:ECH). The net proceeds combined with
planned expenditure on EP-145 in 2025 that will no longer be incurred are
estimated to be circa A$3 million.

 

Project review highlights

 

The Sagebrush Project has the advantages of:

·      Leases held by production ("HBP") of circa 40 bopd (gross)
providing income

·      10,000 acres of leases with production infrastructure

·      Further oil and helium exploration potential identified on
seismic

·      Activity to be determined by Mosman, with no prescribed
expenditure commitments

·      Moderate drilling costs US$2.5-3.5 million depending on depth

·      Helium infrastructure (pipelines, plants, markets)

 

The Coyote Wash Project advantages:

·      New leases with prospects identified on seismic

·      Adjacent to Sagebrush Project

·      Activity to be determined by Mosman, with no prescribed
expenditure commitments

 

Compared to EP-145:

·      Current commitment to acquire and interpret 2D seismic

·      Next 12 month costs estimated to be over A$2.5 million.

·      Drilling costs have increased and are estimated to be circa A$20
million based on other wells in the area.

·      Following community concern on "fracking", legislative review led
to more onerous approvals process and increasing costs

 

Mosman has agreed a binding heads of terms with Echelon to sell 100% of %
EP-145 for A$400,000 in cash and retain a 5% helium and hydrogen royalty
(based on sales price, no deduction of costs).

 

The A$400,000 will be used to progress helium exploration in the USA projects.

 

The disposal is subject to normal conditions, including entering into a formal
sales and purchase agreement and government approvals which are anticipated to
take a few months.

 

Mosman has today completed the acquisition of the outstanding 75% interest
from Greenvale Energy Ltd ("Greenvale", ASX:GRV), as announced on 15 October
2024.

 

The disposal does not include the seismic long lead items being acquired from
Greenvale that Mosman expected to be sold separately for circa $A150,000.

 

The book value in Mosman's accounts of EP-145 (100%) was A$1,503,925 as at 30
June 2024. As an exploration licence, EP-145 has generated no revenue and
there are no historic profit or losses.

 

 

Ranking of projects in Mosman's portfolio (January 2025)

 Project      Country        WI             Operator    Status                      Resource Type                                        Permit size   Prospective Potential (MOG

 Sagebrush    USA, Colorado  83%            Y           Held by production          Oil production + helium                              10,000 acres  High potential for helium and oil exploration; revenue from ongoing oil

                                                                                                                                                     production

 Coyote Wash  USA, Colorado  100%           Y           New lease                   Helium                                               4320 acres    High potential for helium based on offset wells and helium production in the
                                                                                                                                                       basin
 Vecta        USA, Colorado  20%            N           Exploration                 Helium                                               ~5000 acres   Good potential near old and new production
 EP145        Australia, NT  100%           Y           Exploration, permit year 3  Proven gas in West Walker-1, untested helium upside  818.6km2      High gas potential but high costs
 EPA155       Australia, NT  25>>10%        Farmed out  Application to explore      Proven gas in Mt Winters-1, untested helium upside   378km2        High gas potential - could provide infill for Mereenie. Good location for
                                                                                                                                                       helium with proven play elements
 Cinnabar     USA, Texas     75%            Y           Held by production          Oil production                                       348 acres     Moderate potential through optimization of oil production
 Arkoma       USA, Texas     23%            N           Held by production          Oil and gas production                               400 acres     Limited remaining potential

 

 

Andy Carroll, Chief Executive Officer of Mosman, said: "We have taken a
commercial decision to focus our capital allocation and future operational
activities on our US projects. While EP-145 in the Amadeus Basin has helium
potential, the USA has the considerable commercial advantages of a proven
helium production basin, lower drilling and operating costs,
ready availability of services, production infrastructure and access to
markets. We are pleased to retain ongoing interests in helium potential in
EP-145 with a royalty interest which does not require any expenditure
by Mosman.

 

"This transaction, once completed, restores Mosman to being fully funded for
all exploration commitments in the next 12 months, and with funding available
for discretionary exploration activities."

 

 

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

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

 mosman@almastrategic.com (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 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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