Zak Mir talks to Andy Carroll, CEO of Mosman Oil & Gas, about the latest company update at the helium, hydrogen, and hydrocarbon exploration, development, and production company.
Navigating the Helium Gold Rush in the US
In the evolving landscape of energy commodities, helium has emerged as a critical resource with soaring demand and limited supply. Mosman Oil and Gas, under the leadership of CEO Andy Carroll, is strategically positioned to capitalise on this burgeoning market, particularly within the United States. This article delves into Mosman’s journey, its unique positioning in the helium sector, and what investors and industry watchers can expect in the near and medium term.
From Oil and Gas to Helium: Mosman’s Strategic Pivot
Mosman Oil and Gas has a rich heritage rooted in the oil and gas industry, which has provided the company with a strong technical foundation. However, recognising the significant opportunity in helium exploration and production, Mosman has focused on this niche but rapidly growing sector.
Helium, often overlooked in the past, is now experiencing what many describe as a gold rush, particularly in the US. This shift is driven by helium’s essential role in a variety of high-tech applications, including semiconductor manufacturing, medical imaging, and aerospace technologies.
Andy Carroll emphasises that Mosman’s decision to concentrate on the US market is deliberate and strategic. “There are very few small companies focused on helium, especially in the US, which we believe is the place to be,” he explains. This is largely due to the recent opening of the US helium market to private investors after a century of government control, which had previously stifled exploration incentives.
The US Helium Market: Infrastructure and Opportunity
The US helium market differs significantly from other global regions. Historically, helium production and sales were dominated by government-run entities, with restricted access for private companies. The government’s release of its helium reserves disrupted prices and exploration dynamics, but recent regulatory changes have ushered in a new era of opportunity.
“In the US, you have an established helium infrastructure, which is crucial,” Carroll points out. Unlike other regions such as Australia, where helium resources may exist but infrastructure and market access are limited, the US offers a mature ecosystem. This includes pipelines, processing plants, and a ready market driven by demand from critical industries.
Moreover, the US market’s relative lack of competition in helium exploration means companies like Mosman can secure prime acreage and advance projects with less direct rivalry, setting the stage for potentially lucrative near-term production.
Near-Term Commercialisation: The Five Well Drilling Program
One of the most pressing topics for Mosman and its investors is the upcoming five-well drilling program, conducted in partnership with the established private company Vector. While delays in 2024 caused frustration among shareholders and management alike, there is now clear momentum heading into the drilling season.
Carroll offers reassurance: “We’ve seen the rig, it’s currently drilling in the area, and the five-well program is set to commence drilling in May.” The wells are shallow and low-cost, which mitigates risk and accelerates the timeline for results. This is a notable advantage, as rapid drilling and testing cycles mean Mosman can quickly validate helium presence and move towards production.
The proximity to other successful explorers adds confidence. Blue Star Helium, operating nearby, has reported strong helium percentages in every well drilled recently, and Helium 1’s farm-in to Blue Star’s acreage further validates the region’s potential.
What Investors Should Expect
- Drilling Start: May, with mobilization and rig setup imminent.
- Well Characteristics: Shallow depth, quick drilling (a couple of days per well), and low operational costs.
- Testing Phase: Flow testing will follow drilling, providing critical data on helium concentrations and production potential.
- Market Impact: Given Mosman’s current market valuation, which is relatively low compared to peers, the success of these wells could catalyse significant share price appreciation.
Carroll acknowledges the unusual market situation: “We’re one of the lowest market cap helium companies, yet we have evidence of helium on our leases and a well ready to be produced. The relative valuations are quite bizarre.”
Strategic Advantages Amid Global Trade Challenges
The current geopolitical climate and trade tensions, especially those involving tariffs and international supply chain disruptions, have created challenges and opportunities in resource markets. Mosman’s US-based operations provide a hedge against these uncertainties.
“Being in the US means we’re not grappling with tariffs or international trade complications,” Carroll explains. This proximity to market and avoidance of import/export barriers place Mosman in a favourable position, particularly as helium is critical to semiconductor manufacturing — an industry investing billions in US facilities.
The semiconductor sector alone is investing over $60 billion in new manufacturing plants in Arizona, underscoring the growing demand for helium, which is essential in chip production for cooling and other processes.
Medium-Term Outlook: The Sage Brush Project and Beyond
While the near-term focus is on the Vector joint venture and the five-well program, Mosman’s medium-term prospects are equally compelling. The Sage Brush project exemplifies this potential, combining existing oil production infrastructure with helium exploration targets.
Carroll shares exciting developments: “We found confirmation of 2.7% helium in gas samples from old drill stem tests dating back to the 1990s.” This historic data, combined with modern 3D seismic surveys, reveals large helium-bearing structures beneath the oil-producing zones.
The infrastructure at Sage Brush is a major asset. Existing roads, drill pads, and a mothballed pipeline system designed for natural gas are in place, providing a rapid path to commercialisation. This reduces capital expenditure and accelerates timelines compared to greenfield projects.
Furthermore, the project shows promise beyond helium. The oil-producing zones have historically yielded up to 600 barrels per day, and the presence of algal mounds — geological formations known for hydrocarbon accumulation — could represent a “company maker” discovery if successfully developed.
Diversified Portfolio: Balancing Risk and Opportunity
Mosman’s strategy is not a single-bet approach. The company maintains a diversified portfolio across geography, commodities, and project stages, which helps mitigate risk and ensures multiple avenues for potential success.
- Australia Royalties: Mosman holds royalty interests in Australian projects, including the Marini oil field, allowing it to benefit from production without heavy capital investment.
- US Projects: Alongside Sage Brush and Vector’s five-well program, Mosman is involved in the Red Rocks and Coyote Wash projects, each with distinct exploration and production potential.
- Commodity Diversity: While helium is the primary focus, Mosman’s assets also include natural gas and oil, providing cash flow opportunities and operational flexibility.
This multi-faceted approach reduces the binary risk often associated with exploration companies that hinge on a single project’s success. Instead, Mosman is “firing on various cylinders,” positioning itself for both near-term cash flow and medium-term growth.
Why Mosman is a Unique Player in the Helium Sector
Several factors differentiate Mosman Oil and Gas from other helium explorers and producers:
- Established Industry Experience: The team’s background in oil and gas exploration translates well into helium, which often coexists with natural gas reservoirs.
- Strong US Focus: Concentrating on the US market leverages existing infrastructure, regulatory clarity, and proximity to high-demand industries.
- Near-Term Production Potential: With a cased well ready to be re-completed and a drilling program about to commence, Mosman is closer to commercialisation than many peers.
- Robust Data and Seismic Support: Access to 3D seismic data enhances drilling success probability and reduces exploration risk.
- Diversified Asset Base: Exposure to multiple projects and commodities provides balance and resilience.
Conclusion: A Company Poised for Growth in a Critical Market
Mosman Oil and Gas stands at a pivotal point in its evolution. The helium market is experiencing unprecedented demand driven by technological advances and supply constraints. Mosman’s strategic focus on the US, combined with its strong asset portfolio and imminent drilling program, positions it well to capitalise on this trend.
While investors have faced delays and uncertainties, the forthcoming drilling results from the Vector joint venture promise to be a significant catalyst. Meanwhile, the Sage Brush project and other assets provide a medium-term growth pipeline supported by solid infrastructure and geological data.
In a market where many companies remain speculative or early-stage, Mosman’s blend of experience, data, infrastructure, and diversified interests offers a compelling risk-reward profile. For those looking to participate in the helium gold rush, Mosman Oil and Gas is undoubtedly a company to watch.
