The Cinnabar project’s footprint has been expanded by Mosman Oil and Gas.

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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