ORG Origin Energy Limited

(Rewrites first paragraph, adds detail and share price information.)

By Ian Walker

LONDON--Shares of Mosman Oil & Gas Ltd. (MSMN.LN) fell as much as 23% in early trade Tuesday after the company said it has raised 1.5 million pounds ($2.3 million) in a heavily discounted share placing.

The New Zealand and Australia-focused oil exploration and development company has issued 33.33 million ordinary shares via a placing and subscription at 4.5 pence each, a 27% discount to its closing share price of 6.13 pence on Monday.

The company said it will use the money to progress the acquisition of a proposed 70% interest in the South Taranaki energy project assets in New Zealand, announced earlier this month.

Shares at 10050 GMT are trading 1.25 pence, or 20% lower, at 4.88 pence, having dropped as low as 4.75 pence earlier in the session. They are currently down 77% over the past 12 months.

Mosman announced on Sept. 3 that it was buying a share in the assets for 7 million New Zealand dollars ($4.44 million) payable in two parts, from Origin Energy Ltd. (ORG.AU). The first tranche of NZ$4.9 million is payable on completion with the second tranche due six months later.

WRDLS Pty Ltd., a private company with personnel experienced in the resource and energy sector, is buying the other 30% of the project.

Completion is dependent upon a number of conditions, including Mosman and WRDLS providing reasonable financial assurance to Origin Energy by Sept. 30.

The project assets being bought include fully operational and established oil and gas processing facilities, equipment, permits, infrastructure, and the assignment of both key employee contracts and relevant commercial contracts, including oil and gas sales agrements.

Since October 2014 the project has been producing an average 603 barrels of oil equivalent a day, which would generate annual revenue of NZ$8 million based on current production rates, oil price and exchange rates, the company said.

Mosman said at the time of the acquisition that it has already completed detailed due diligence on the project and identified areas that have the potential to significantly increase production levels within a reasonable time period.

Mosman added that it has verified and prioritized a list of 12 opportunities that are expected to increase production, following completion of the acquisition, quickly and at modest cost, some of which are as simple as changing level sensors to avoid false alarms.

-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

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(END) Dow Jones Newswires

September 22, 2015 06:53 ET (10:53 GMT)

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