After analyzing the Cinnabar project and interpreting its 3D seismic data, Mosman Oil and Gas Ltd (AIM: MSMN) has acquired a new lease adjacent to the project in Texas.
The data revealed the possibility of extending the Cinnabar field beyond its current 350-acre lease, prompting the firm to apply for an additional 120 acres, which has been granted.
The principal terms of the lease are:
1. Payment of USD 36,000 (AUD 54,000)
2. Initial term of eighteen months that may be extended by the drilling and production of a well. Whilst there is production, the lease would be “Held by Production”
3. A Royalty of 25% of gross production (which is standard in this part of Texas)
Mosman has identified a preferred drilling location within the new lease, and drilling a well in this area is now the company’s primary focus, according to a statement. Details on timing, location, and costs will be announced in the future.
The lease was purchased at a cost of US$36,000 plus a 25% royalty on gross production, which the company considers typical for this region of Texas. The lease will have an 18-month initial term, Mosman stated.
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