REG - Mosman Oil & Gas - Sale of Oil Assets

Mosman Oil and GasAnnouncement

10/06/2024 07:00

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RNS Number : 7054R  Mosman Oil and Gas Limited  10 June 2024

 

10 June 2024

 

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

Sale of Oil Assets

Funding the focus on helium

 

Mosman Oil and Gas Limited (AIM: MSMN) the helium, hydrogen and hydrocarbon
exploration, development, and production company, is pleased to announce that
it has sold its interest in Nadsoilco LLC for a consideration of up to US$1.75
million subject to the completion of due diligence by the acquiror.

 

Nadsoilco LLC currently owns the working interest in Stanley, Greater Stanley
and all of Mosman's interests in the Winters leases in the Polk County, Texas,
USA. Prior to completion, Mosman will transfer to Nadsoil LLC the circa 13%
working interest in the Stanley lease and other Mosman assets in this project
area.

These assets are currently operated by Mosman and the sale will free up
management resources to focus on helium exploration. The buyer, RCM Tech
Solutions LLC, has experience in operating oilfields and will take over
operatorship of these leases.

The consideration for Nadsoilco LLC is US$1,000,000, to be paid in cash upon
completion on 3 September 2024. Three cash payments of a further US$250,000
each would be paid within 10 days of the end of June 2025, 2026 and 2027 if
the gross production rate average for each intervening period is greater than
an aggregate 250 bopd. This oil production rate is higher than the current
production rate, but is less than the assets have produced in the past and
could be achieved by workovers or drilling one or more production wells. Each
of these payments may be reduced by a portion of expenditure on abandonment
costs in that period, and Mosman does not anticipate any such reduction to
exceed the cost of the abandonment of one well, which is circa US$50,000
(gross). If these payments are made in full then the total sale proceeds would
be up to US$1,750,000. The sale is conditional for 30 business days to provide
the Buyer with time for technical and legal due diligence.

The proceeds of the sale will increase working capital, to be used for funding
the recently acquired interest in the Vecta Helium Project in Colorado; other
helium exploration and production opportunities; and its remaining oil and gas
interests, primarily at Cinnabar where the Company considers that it can add
value. At Cinnabar, the recently recompleted zone needs stimulation to
optimise production rates.

 

The assets being sold had net revenue to Mosman of AU$1,603,090 (US$
1,056,163) and net profit of AU$ 418,876 (US$ 271,262) in the financial year
ending 30 June 2023. The value of these assets on Mosman's balance sheet at 31
December 2023 was AU$3,041,673 (US$ 2,003,945).

 

Andy Carroll, CEO of Mosman commented: "We are pleased to deliver on our goal
of commercialising some of our existing portfolio of oil and gas assets by
sale as we seek to take advantage of compelling opportunities for helium
exploration.

"We see great potential in helium, as demonstrated with our commitment and
progress at EP 145 in Australia and the newly acquired interest in the Vecta
Helium Project in USA, due to the proven presence of helium and the low cost
of shallow exploration and production wells.

 

"This sale demonstrates our commitment to deliver on the corporate plan to
focus on helium opportunities, where we are able to leverage our helium
exploration expertise gained over several years in Australia to identify
quality helium projects.

 

"Looking ahead, Mosman will continue to commercialise its oil and gas assets
and seek opportunities for helium and hydrogen 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                                                         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@almastrategic.com)

 

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
existing exploration permits. The Company has several projects in the US, in
addition to exploration projects in the Amadeus Basin in Central Australia.

 

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