Mosaic Clears Decks for Busy Quarter

The Board of Mosaic Oil has terminated discussions with potential investors.

Mosaic advised the market in early August of an unsolicited approach, and subsequent expressions of interest from potential investors.

Mosaic has re-focused its attention on its core activities and is preparing to drill up to four significant wells in early 2006. In addition, the developing oil and gas producer is preparing to introduce new joint venture participants into the Surat-Bowen Basin to accelerate exploration and development of existing discoveries, and the Company has a mandate to diversify into new petroleum provinces by acquiring acreage with material impact for the Company. "Mosaic has cooperated with the investors interested in our business but we need to clear the decks and maintain focus on developing our oil and gas interests," said Mosaic Chairman, Dr. Don Stammer.

"We are a public company and if any investor wishes to talk with us we will accommodate that within set time frames in the future. But our focus will be on achieving the gains for shareholders from delivery of the strategy outlined at the recent Annual General Meeting."

Mosaic has budgeted $7.6 million for development and expansion in 2006 and subject to drill rig availability and in some cases joint venture approval, Mosaic expects to:

  • Complete the drilling of its Waggamba-1 horizontal well (MOS 100%). Ensign Rig 44 will be used in late December 2005 to condition the current bore hole in preparation for the horizontal drilling. Management is currently finalizing negotiations to secure the Mitchell 151 rig to commence drilling in the second half of January 2006.
  • Drill a Churchie well (MOS 49%) to test the Rewan gas potential following a substantial gas flow from a nearby well in an adjoining license.
  • Carry out an extended flow test of the Rockhampton High-1 (MOS 100%) oil discovery.
  • Participate in drilling the Hurricane-2 oil appraisal well on Western Australia's North West Shelf (MOS 6%).
  • Drill a Bainbilla (MOS 83.3%) stratigraphic gas play with significant hydrocarbon potential in Tinowon and Rewan sands.
  • Conclude negotiations with domestic and international parties vying for farm-in rights to Mosaic's Downlands and Downlands East fields (MOS 71%-83% in PL 119) and in the Bainbilla Block of ATP 471P.
  • Acquire new 2D and 3D seismic and perform facility upgrades to increase hydrocarbon reserves and oil, gas and LPG production.

"We have budgeted for all these activities while maintaining over $6 million cash reserves for other opportunities that may arise through 2006," says Dr. Don Stammer.

"Now that Mosaic has steady and long term income, we can now expand and grow the company in a controlled way to bring greater returns to shareholders," Dr Stammer concluded.