Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development, and production company, advises an update on the planned drilling at Cinnabar in East Texas, as well as a joint venture for 10% of the lease.
Casing purchased and rig contract signed
Since May when Mosman announced the planned drilling and fundraising to pay for the well, planning has moved forward on all required fronts.
The required casing for the well has now been purchased and the rig contract signed enabling work to start shortly including on-site clearances and road upgrades where necessary.
At this stage the timeline remains on track for drilling to commence in early September, subject to the final rig schedule.
Additional Farm-Out Agreement
Mosman acquired 97% of the lease in 2020 and agreed to farm-out 12% to Contour Exploration and Production LLC (“Contour”). Contour may earn a 12% working interest in the Cinnabar lease when a well is drilled, in return for contract operator services. Those services are currently partially being utilised in the planning and contractual elements of the well.
Mosman has farmed-out an additional 10% of the lease, reducing the amount to be spent and its ownership of the lease to 75%. No further farm outs are envisaged.
Under the terms of the additional farm-out the incoming party will fund 13.3% of costs to earn a 10% share of the lease. Costs are expected to be circa USD1.0 million and an additional USD600k for completion in a success case.
Financial Information
Mosman further advises that at its financial year end, 30 June 2022, it had circa AUD2.4 million in cash.
Mosman will shortly publish the annual production numbers, and the production of the Annual Report has commenced. The Annual General Meeting is currently scheduled for November.
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 W Barr, Executive Chairman
Andy Carroll, Technical Director
