TIDMMSMN
RNS Number : 3514E
Mosman Oil and Gas Limited
27 October 2022
27 October 2022
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Cinnabar Development, Well Planning and Placing
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration,
development, and production company, announces Cinnabar
Development, future well planning, ongoing work in central
Australia and a GBP800,000 conditional placing.
Mosman's strategic plan remains to identify opportunities which
will provide operating cash flow and have development upside, in
conjunction with selective exploration. The practical step in
achieving this plan includes the recent successful drilling at
Cinnabar, recent workovers at Stanley, planning the next stages of
redevelopment at Cinnabar, and the advancement of the EP 145 helium
and hydrogen project.
Cinnabar
Whilst preparing for and drilling the recent successful well at
Cinnabar, a review of the two existing production wells on the
lease was undertaken. This study determined there was potential to
increase production. As announced, the detailed desktop work
required before field work can start has now commenced.
Mosman has successfully drilled a development well at the
Cinnabar project (Cinnabar-1), and flow rates will be announced
before the end of November.
In addition, and given the success in drilling and logging the
Cinnebar-1 well, Mosman is also proceeding with planning the
drilling of additional development wells at Cinnabar and that work
has started.
EP 145
Recent technical work on the Company's 100% owned permit has
identified favourable scenarios for all three essential play
elements related to viable helium and hydrogen plays in EP 145.
Technical work will continue, in parallel with continuing to
progress various landowner and government approvals required for
on-site operations.
Based on the Geognostics report, and data from other wells in
the Amadeus basin, Mosman has estimated gross Prospective Resource
volumes for hydrocarbons, helium, and hydrogen associated with the
Walker Creek Anticline as a lead within the boundaries of the EP
145 permit using a deterministic approach and applying the SPE PRMS
standard.
Prospective Resources Low Estimate Best Estimate High Estimate
(Bcf)
Total gas 12 440 2,290
============== =============== ===============
Helium 0.3 26.4 229
============== =============== ===============
Hydrogen 0.24 26.4 275
============== =============== ===============
Source: Mosman Oil and Gas Ltd, October 2022
The ongoing exploration work programme on EP 145 is to acquire
seismic prior to drilling an exploration well. Mosman has applied
for the required regulatory and Central Land Council ("CLC")
approvals. The CLC has conducted a site survey as a pre-requisite
to land access approval for seismic acquisition.
EP (A) 155
The Mount Winter helium and hydrogen Project (exploration permit
application EP (A)155), is located in the Amadeus Basin in Northern
Australia, which the Company owns 100% subject to a farmout
agreement whereby Georgina Energy Plc ("Georgina") may earn up to
90% by meeting farm in conditions, including drilling a well.
Mosman, in conjunction with Georgina Energy, is in the process of
negotiating a native title agreement to allow for the grant of EP
155. Georgina has submitted a Schedule One to the London Stock
Exchange with the intention to admit to trading on AIM.
Placing Details
The Company has raised GBP800,000 (before expenses) by way of a
placing of 1,142,857,142 new ordinary shares of no-par value in the
capital of the Company ("Placing Shares") through Monecor (London)
Ltd trading as OvalX ("Oval"), at a placing price of 0.07p per
share (the "Placing Price") (the "Placing"). Investors are also
receiving one warrant for every two Placing Shares exercisable at a
price of 0.15p with a term of 24 months, with 571,428571 warrants
being issued in aggregate (the "Placing Warrants").
Funding and Use of Proceeds
In May 2022, Mosman raised GBP1.1 million (before costs) to
enable the drilling and of its first well at Cinnabar. Since that
time, the well has been drilled and it is in the process of
completion. Certain costs have exceeded the May 2022 budget which
include significant increases in the cost of the drilling rig
rates, steel casing and tubing costs as well as fuel. Much of the
increase is related to current geopolitical issues, inflation and,
in addition, the marked change in the GBP / USD exchange rate.
Mosman decided to undertake this Placing to provide additional
funding for the following:
1. Ongoing work on EP 145 including continued technical studies
and securing approvals and payment of fees to be made to
representatives of traditional owners
2. The cost of bringing the Cinnabar-1 well into production,
including a new flow line from the wellhead to the existing
production infrastructure;
3. Refurbishment and upgrade of the existing production
infrastructure;
4. Progress the examination of the feasibility of workovers at
Arco-Fee G-1 well ("G1") and Arco-Fee G-2 well ("G2") to increase
production;
5. Commence planning activities in respect to the next Cinnabar
development wells; and
6. Working capital.
John W Barr, Chairman, said: "Mosman continues to move Cinnabar
and its other projects forward proactively and on several levels.
The board is extremely pleased with the outcome of the drilling and
logging of the recent Cinnabar-1 well, and now the potential to
workover existing wells to restore production in the shorter
term."
Admission to AIM and Total Voting Rights
The Placing is conditional on, inter alia, the Placing Shares
being admitted to trading on AIM. Application has been made to the
London Stock Exchange for the Placing 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 2 November 2022.
Following the issue of the Placing Shares, the Company's share
and total voting rights will comprise 6,362,895,194 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.
Related Party Transaction
The participation of Oval in the Placing and its role as sole
broker to the Placing is a related party transaction for the
purposes of AIM Rule 13 of the AIM Rules for Companies. The
Directors independent of the Placing (being John W Barr, Andy
Carroll and John Young) consider, having consulted with SP Angel
Corporate Finance LLP, the Company's Nominated Adviser, that the
Placing involvement of Oval is fair and reasonable in so far as
Mosman's shareholders are concerned.
Qualified 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
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 John NOMAD and Joint Broker
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 OvalX
+44 (0) 20 3405 0205 Thomas Smith
+44 (0) 7525 324431 020 7392 1432
mosman@almapr.co.uk
Updates on the Company's activities are regularly posted on its
website:
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.
Glossary
boe Barrels of oil equivalent based on calorific value as
opposed to dollar value
boepd Barrels of oil per day of oil equivalent based on calorific
value as opposed to dollar value
--------------------------------------------------------------
bopd Barrels of oil per day
--------------------------------------------------------------
Gross Project Means the production of BOE at a total project level
Production (100% basis) before royalties (where Mosman is the Operator)
and where Mosman is not the operator the total gross
production for the project
--------------------------------------------------------------
Mcf Thousand cubic feet
--------------------------------------------------------------
Bcf Billion cubic feet
--------------------------------------------------------------
Mcfpd Thousand cubic feet per day
--------------------------------------------------------------
MBtu One thousand British Thermal Units
--------------------------------------------------------------
MBtupd One thousand British Thermal Units per day
--------------------------------------------------------------
MMBtu One million British Thermal Units
--------------------------------------------------------------
MMBtupd One million British Thermal Units per day
--------------------------------------------------------------
Net Production Net to Mosman's Working Interest; Net Production attributable
to Mosman means net to Mosman's Working Interest before
royalties
--------------------------------------------------------------
SPE Society of Petroleum Engineers
--------------------------------------------------------------
SPE PRMS A standard for the definition, classification, and estimation
of hydrocarbon resources developed by the Oil and Gas
Reserves Committee of the Society of Petroleum Engineers
and named the Petroleum Resource Management System
--------------------------------------------------------------
SPE defines Prospective Resources are those quantities of
petroleum which are estimated, on a given date, to be potentially
recoverable from undiscovered accumulations. SPE also notes
"Prospective Resources have both an associated chance of geologic
discovery and a chance of development. Prospective Resources are
further categorized in accordance with the range of uncertainty
associated with recoverable estimates, assuming discovery and
development, and may be sub-classified based on project maturity"
and "The Range of Uncertainty.....reflects a reasonable range of
estimated potentially recoverable volumes for an individual
accumulation. Any estimation of resource quantities for an
accumulation is subject to both technical and commercial
uncertainties, and should, in general, be quoted as a range".
https://www.spe.org/en/industry/petroleum-resources-classification-system-definitions/
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