HOUSTON - Mosman Oil and Gas Limited (AIM: MSMN) has announced the acquisition of an 82.5% working interest in a 10,000-acre helium and hydrocarbon lease in Colorado, known as the Sagebrush Project. The lease, currently producing oil, is held by production from seven active wells and is situated adjacent to the company's Coyote Wash Project.
The Sagebrush Project, under the administration of the Ute Mountain Ute Tribe, is seen by Mosman as a strategic expansion of its helium exploration and development initiatives. The acquisition, completed through Mosman Helium LLC, involves a cash transaction of US$630,000 from the company's existing reserves.
The transaction, pending due diligence and standard approvals, is set to take effect on January 1, 2025, with a completion date slated for January 31, 2025. Mosman will also assume operatorship of the lease.
According to technical studies, the Sagebrush Project area contains the geological elements necessary for helium accumulation, including a proven source of helium in the igneous basement rocks, an effective salt seal, and the Leadville and McCracken formations as reservoirs. Additionally, seismic surveys have identified several undrilled structures with potential for significant helium quantities.
The current gross oil production at Sagebrush is approximately 40 barrels of oil per day (bopd). The lease also has a history of steady oil production with minimal decline, providing a revenue stream while holding the acreage for further exploration.
Mosman's US Operations Director, Howard McLaughlin, has independently agreed to acquire a 10% interest in the Sagebrush Project for $70,000, reflecting the same cost ratio as Mosman.
Andy Carroll, CEO of Mosman, emphasized the acquisition's alignment with the company's strategic shift towards helium exploration and stated that the Sagebrush Project, along with the Coyote Wash Project, represents a fulfillment of their acquisition goals set during the September 2024 capital raise.
The Sagebrush well, drilled in 1984, produced oil above the salt layer and non-flammable gas below, although helium was not tested at that time. The well's initial production was over 600 barrels per day, contributing to a cumulative output of over 300,000 barrels of oil across nine wells.
For the 82.5% interest in the Sagebrush Project, the net profit before income tax for the twelve months ended June 2024 was approximately US$286,000, after accounting for royalties, local taxes, and operating costs.
This expansion of Mosman's portfolio into helium exploration is based on a press release statement and reflects the company's broader diversification strategy within the helium and hydrocarbon sectors.
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