Mosman Oil and Gas, the helium, hydrogen and hydrocarbon exploration, development and production company, has announced the first estimate of helium and hydrocarbon volumes at the Sagebrush Project in Colorado, US.
- Maiden C2 net best estimate Contingent Resources of 205 million cubic feet (mmcf) of helium and 1.7 billion cubic feet (bcf) of hydrocarbon gases at the Sagebrush Project as determined by Mosman utilising a report from Four Corners Helium LLC ("FCH") dated 5 May 2025 in which seismic interpretation indicates a structural closure of circa 585 acres and estimates the initial gas in place volume as 18.4 bcf and recoverable gas volume to be 11 bcf ("FCH Report").
- The combination of existing wells, flow tested helium and hydrocarbons, oil production infrastructure and an existing gas pipeline provide the ingredients to move in stages to a potential fast track helium and hydrocarbon development at the Sagebrush Project.
- The fast-track development potential is in addition to the significant exploration prospects identified by seismic at both the Sagebrush Project and the adjacent Coyote Wash Project.
Andy Carroll, Chief Executive Officer of Mosman, said: 'This Maiden Contingent Resource estimates for helium and hydrocarbon gases is a significant milestone, indicating the existing well could be used to fast-track helium production in stages.
'We have all the key ingredients for assessing future development potential with an existing well, gas composition, production facilities and a gas pipeline.
'We are now working on a development feasibility study that will likely include recompletion of the well and an extended flow test, as well as design of production facilities for selling helium via road tanker or pipeline and using the hydrocarbons for power generation and/or sale.
'In addition, at the nearby and separate Coyote Wash Project, the structures at its various Leadville prospects appear on 3D seismic to be larger than the structure mapped at the Sagebrush Project. We will now also commence work on a separate internal resource estimate for the Coyote Wash leases using the Sagebrush data. Given their proximity, these two Projects represent a compelling combination given the data, logistics and potential development synergies.'
Sagebrush Project
The Sagebrush Project is in the Four Corners region in Colorado, US which is an area of established helium production from the Leadville formation carbonates from fields such as Doe Creek, 50 miles to the north of the Sagebrush Project.
The Sagebrush Project current oil production is circa 40 bopd (gross) from 7 wells which enable the 10,000 leased acres to be Held By Production. Mosman has existing well data, oil production records and seismic data and recently received test data from the Sagebrush-1 well drilled in 1993 from the previous operator where a drill stem flow test ("DST") conducted in the Leadville Formation flowed gas with 2.76% helium, 34.5% nitrogen, 39.9% carbon dioxide, 19.5% methane and circa 3% other petroleum gases.
At current market prices, the main value of the gas is the helium. The hydrocarbons may have value either for sale or avoiding costs by onsite power generation.
The data has been evaluated by an experienced team of consultants at FCH. The scope of its work includes a detailed petrophysical evaluation of Sagebrush-1 well logs and offset wells in addition to interpretation of the recently reprocessed 2D seismic swath data to determine the area of closure and reservoir parameters.
Seismic Interpretation depth contour map of top of Leadville formation with Sagebrush-1 location (shown as a dot and circle). White dotted line shows area of closure (Source: FCH)
Contingent Resources
Resource Estimate
Mosman has utilised the FCH Report to estimate net C2 Best Estimate Contingent Resources. The resource assessment has been conducted in accordance with standard principles of Petroleum Resource Management (PRMS) which specifically applies to oil and gas reserves and has been deemed suitable for helium by the SPE.
Mosman notes the relevant reservoir zone has been drilled, logged and demonstrated to flow and the existing well is cased and cemented across the relevant zones, and that seismic data has been interpreted to determine the size of the structure. However, more work is required to demonstrate the optimal development, costs and markets, and is currently insufficient to assess commerciality. Work has already started to be able to determine commerciality and to be able to make a final investment decision ("FID") with the initial objective to put this well on production and thereafter determine the commerciality of additional development wells.
Risk
The Sagebrush-1 well flowed and tested helium and hydrocarbon gas in volumetrically significant percentages and shut-in pressures indicated a reservoir that extended beyond the immediate area of the wellbores. The extrapolation of well data to the larger area of closure has some risk and, therefore, the Geological Chance of Success for the Contingent Resource (Pg) is deemed to be 0.75.
Given the favourable location, existing well, infrastructure and helium markets, the probability of commerciality is high, estimated to be 0.7 (Pcom).
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Source: Mosman Oil and Gas
