AIM-listed Mosman Oil and Gas has undertaken a placing to raise £400,000 (before expenses) by the issue of 500,000,000 new ordinary shares at a placing price of 0.08p. Investors are also receiving one warrant to subscribe for a further new ordinary share at an exercise price of 0.15p with a term of 12 months. The Placing is unconditional save for admission of the shares to trading on AIM.
The net proceeds raised from the Placing will be used towards the drilling of the Falcon well at the Champion Project in Texas.
The Champion Project
Under the farm-in agreement with Baja Oil and Gas, Mosman has a 60% working interest and will pay 80% of the first well in the Champion Project. This well has an estimated total cost of cUSD700,000 to drill and complete. Baja has a 30% interest and will pay 10% of the well cost. Contour Exploration and Production, owned by Howard McLaughlin, Mosman's US Manager, has 10% of the lease and will pay 10% of the well cost.
In addition to Falcon, several other prospects in the Project area have been mapped by Baja using 3D seismic, including Galaxie, Durango, Corona East and Corona West.
John W Barr, Chairman of Mosman, commented:
'Falcon is one of several prospects on the 240 acre Champion lease which is adjacent to existing production facilities. Mosman has 60% working interest in the lease, and this level of equity means that a successful well would enable a significant increase in net production to Mosman. Falcon will also provide us with important geological information to refine several prospects on the lease, including Galaxie which already has a well plan and drilling location identified.
'We expect to shortly complete planning, start preparation of the Falcon wellsite in July, spud the well in August, and announce results a few weeks later.
'In addition to Falcon activity, the workover of the Stanley-1 well is now underway and should be completed next week. The workover at Greater Stanley awaits approvals by the relevant authorities.
'Significantly, the Stanley Operator has today indicated that the drilling of Stanley-4 is now planned for August 2020. An AFE for that drill (where the site works have already been completed) is expected shortly. With reduced drilling activity, more rigs are available, and this is expected to result in lower drilling costs.
'This placing, along with the recent Blackstone settlement will result in Mosman having cash of over AUD 1.0 million. The pending sale of the Welch Oil Field announced on 20 May 2020 and due to complete shortly, could increase this to AUD 1.4 million. Mosman is now able to invest in several of our highest-ranked projects. Recent swift action by the Board has resulted in an exceptional turnaround from the position in March 2020, when falling oil prices and the pandemic led to a severely challenging business environment.'
Source: Mosman Oil and Gas