Mosman to Sell Stake in Gas, Oil in Shift to Helium, Hydrogen

Mosman Oil and Gas Limited is selling its interest in gas and oil producer Nadsoilco LLC in line with its plan to shift its focus from hydrocarbons to helium and hydrogen projects.

Nadsoilco LLC currently owns the working interest in Stanley, Greater Stanley and all of Mosman's interests in the Winters leases in Polk County, Texas. Prior to the transaction completion, Mosman will transfer to Nadsoil the circa 13 percent working interest in the Stanley lease and other Mosman assets in this project area, it said in a news release.

The sale will be to RCM Tech Solutions LLC, which has experience operating oilfields and will take over operatorship of these leases, according to the release. The consideration for the assets can reach up to $1.75 million, subject to the completion of due diligence by RCM.

According to the terms of the transaction, $1 million will be paid in cash upon completion on September 3. Three cash payments of a further $250,000 each would be paid within 10 days of the end of June 2025, 2026, and 2027 if the gross production rate average for each intervening period is greater than an aggregate of 250 barrels of oil per day (bopd). The oil production rate is higher than the current production rate, but is less than the assets have produced in the past and can be achieved by workovers or drilling one or more production wells, Mosman noted.

Each of the payments may be reduced by a portion of expenditure on abandonment costs in that period, and Mosman does not anticipate any such reduction exceeding the cost of the abandonment of one well, which is approximately $50,000 gross. If the payments are made in full, then the total sale proceeds would be up to $1.75 million. The sale is conditional for 30 business days to provide the buyer with time for technical and legal due diligence, according to the release.

The proceeds of the sale will increase working capital, Mosman said. It plans to use the proceeds to fund the recently acquired interest in the Vecta Helium Project in Colorado, other helium exploration and production opportunities, and its remaining oil and gas interests, primarily at Cinnabar where the company said it can add value. At Cinnabar, the recently recompleted zone needs stimulation to optimize production rates, Mosman said.

Mosman noted that the assets being sold had net revenue to the company of $1,056,163 and net profit of $271,262 in the financial year ending June 30, 2023. The value of these assets on the company’s balance sheet at the end of 2023 was $2,003,945.

Mosman CEO Andy Carroll said, "We are pleased to deliver on our goal of commercializing some of our existing portfolio of oil and gas assets by sale as we seek to take advantage of compelling opportunities for helium exploration”.

"We see great potential in helium, as demonstrated with our commitment and progress at EP 145 in Australia and the newly acquired interest in the Vecta Helium Project in [the] USA, due to the proven presence of helium and the low cost of shallow exploration and production wells,” Carroll remarked.

He added that the sale demonstrates the company’s “commitment to deliver on the corporate plan to focus on helium opportunities,” as it was able to leverage the helium exploration expertise gained over several years in Australia to identify quality helium projects.

"Looking ahead, Mosman will continue to commercialize its oil and gas assets and seek opportunities for helium and hydrogen projects,” he concluded.

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