TIDMMSMN
RNS Number : 8820S
Mosman Oil and Gas Limited
19 March 2021
19 March 2021
Mosman Oil and Gas Limited
("Mosman" or the "Company")
GBP1.5m Placing completed for Helium, Hydrogen and
Hydrocarbon
Exploration at EP-145 and Update on Falcon well
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration,
development and production company announces an update on its 100%
owned EP-145 project in the Amadeus Basin, in the Northern
Territory of Australia and the completion of a GBP1.5 million
Placing to fund the next phase of development of this project.
Mosman also provides an update in respect of recent developments at
the Falcon well where the Operator of the Falcon-1 well in East
Texas, USA, has reported that the downhole logs have been completed
and a course of action agreed.
Placing to fund EP145 exploration
Mosman had considered joint venture partnerships to develop
EP-145, however, on further review the Board believes it is an
exciting opportunity and would be beneficial to retain its 100%
ownership. With the benefit of a GBP1.5m Placing, Mosman now plans
further exploration on this project in the Amadeus Basin where
drilling results in nearby permits have demonstrated the commercial
production of hydrocarbons and the presence of significant amounts
of helium (up to 6% in Magee-1) and hydrogen.
The Placing will fund all the following work planned for 2021.
It does not include drilling wells.
-- Airborne gravity survey in June 2021 to provide more detail
regarding the deep geology in the permit, in particular the
presence and distribution of salt deposits that provide the seal
for helium, hydrogen and hydrocarbons.
-- The processing and interpretation of gravity data and updating the geological model.
-- The acquisition of seismic in September/October 2021 aimed at defining a drilling prospect.
-- The processing and interpretation of seismic data November/December 2021.
-- Planning and long lead items for drilling.
John W Barr, Chairman, said: " Mosman has always seen the
potential in EP-145 and with a global shortage of helium and demand
increasing, combined with the opportunity to fund this exciting
exploration project, we look forward to the results of the next
phase of the exploration programme later this year."
Details of the Fundraising
To fund the exploration programme and drilling at EP-145, the
Company has raised GBP1.5m (before expenses) by way of a placing of
1,000,000,000 new ordinary shares of no par value in the capital of
the Company ("Placing Shares") through the company's broker Monecor
(London) Ltd, trading as ETX Capital, at a placing price of 0.15p
per share (the "Placing Price") (the "Placing"). Investors are also
receiving a one for two warrant exercisable at a price of 0.25p
with a term of 24 months (the "Placing Warrants").
Helium
Helium has become an increasingly valuable strategic resource,
used in medical, nuclear and space technology and a vital element
in the manufacture of MRIs, semiconductors, and is critical for
fibre optic cable manufacturing. The demand for Helium
significantly exceeds current production levels and this
undersupply has pushed prices to over 100 times that of natural gas
resources.
Until relatively recently most of the Helium resources were
supplied by the US, however, Australia is currently one of the
leading producers of Helium, producing 3% of the world's supply and
holds significant potential resources to expand production.
The Bayu-Undan gasfield located offshore in the Timor Sea is a
source of Helium to the LNG plant in Darwin. The Helium accounts
for 0.1-0.3% of raw feed gas and after processing comprises A grade
liquid Helium.
Two wells have drilled into the older Proterozoic stratigraphy
of the Amadeus Basin and both have encountered naturally occurring
helium gas. The first well, Magee-1, drilled in 1992 flowed gas
containing 6.2% Helium from the Heavitree Quartzite which directly
overlies fractured grantic basement. A second well, Mt Kitty-1
drilled in 2014, encountered gas within fractured basement,
containing up to 12% Helium. These extremely high concentrations
are amongst the highest in the world to date.
Helium production has been primarily associated with natural gas
production these high concentrations observed in the Amadeus Basin
may be sufficient to enable helium extraction independent of
natural gas (Waltenberg, 2015).
Mosman Australian Operations
Mosman Oil and Gas operate its Australian permits from Sydney,
Australia and have a highly experienced technical team. Technical
director, Andy Carroll has 40 years of international operating
experience including drilling and production with BP. Geological
Advisor, Dr Julie Daws has over 25 years in the oil and gas
industry working with large multi-national companies including
ConocoPhillips, Statoil and independent Australian producers in
hydrocarbon basins across the world. Andy and Julie have been
involved in progressing EP 145 for several years with visits to EP
145 and meetings with the government and the Central Land Council.
The team utilizes the expertise of Australian based Geophysical
companies, including Synterra Technologies to acquire seismic and
other geophysical surveys.
EP-145
Permit EP145 contains proven hydrocarbon resources in
traditional post-salt plays and there is evidence from seismic of
large, pre-salt structures with the potential to hold significant
resources of helium and hydrogen in addition to natural gas.
Operators of adjacent permits EP 112 and EP 115 have identified
large prospects including Dukas and Zorba (ref Central Petroleum
Limited).
Other Matters
The fundraising is being completed by the company's broker
Monecor (London) Ltd, trading as ETX Capital. ETX will receive 20
million two year warrants exercisable at 0.15p (the placing
price).
Admission to AIM and Total Voting Rights
The Placing is conditional on, inter alia, the Placing Shares
being admitted to trading on AIM. Application will be made to the
London Stock Exchange for the Fundraising Shares, which will rank
pari passu with the Company's existing issued ordinary shares, to
be admitted to trading on AIM and dealings are expected to commence
at 8:00 a.m. on or about 25 March 2021.
Following the issue of the Fundraising Shares, the Company's
share and total voting rights will comprise 3,646,513,052 Ordinary
Shares of no par value and the Company does not hold any shares in
treasury .
Consequently, the above figure may be used by shareholders in
the Company as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the share capital of the Company
under the Financial Conduct Authority's Disclosure and Transparency
Rules.
Falcon well update
The Operator of the Falcon-1 well in East Texas, USA, has
reported that the downhole logs have been completed.
The recent production logs indicate water is entering the well
bore through the lowest perforation. The well continues to produce
oil, gas and water. The Operator is preparing an AFE to squeeze
cement and re-perforate the same pay zone to attempt to reduce the
water flow. Subject to the results of that workover, the JV may
consider completing the well in a higher zone.
Mosman has a 50% working interest in the well and will provide
further updates as appropriate including in relation to the impact
of reduced Falcon production on the expected results for the
financial year ended 30 June 2021.
Competent Person's Statement
The information contained in this announcement has been reviewed
and approved by Andy Carroll, Technical Director for Mosman, who
has over 35 years of relevant experience in the oil industry. Mr.
Carroll is a member of the Society of Petroleum Engineers.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries:
Mosman Oil & Gas Limited NOMAD and Joint Broker
John W Barr, Executive Chairman SP Angel Corporate Finance LLP
Andy Carroll, Technical Director Stuart Gledhill / Richard Hail
jwbarr@mosmanoilandgas.com / Adam Cowl
acarroll@mosmanoilandgas.com +44 (0) 20 3470 0470
Alma PR Joint Broker
Justine James Monecor (London) Ltd trading as
+44 (0) 20 3405 0205 ETX Capital
+44 (0) 7525 324431 Thomas Smith
mosman@almapr.co.uk +44 (0) 20 7392 1432
Updates on the Company's activities are regularly posted on its
website: www.mosmanoilandgas.com
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