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LONDON - Mosman Oil and Gas Limited (AIM:MSMN), an exploration and production company specializing in helium, hydrogen, and hydrocarbons, has announced a significant increase in its stake in a key lease area in Colorado. The company has raised its interest from 20% to 90% in the Billy Goat Area of Mutual Interest (AMI) lease, situated in Las Animas County.
The increase in Mosman’s share comes as a result of an agreement to fully fund the drilling of an upcoming exploration well, estimated to cost under $200,000, which will be covered by the company’s existing cash reserves. The drilling rig is already positioned, and drilling is set to begin within 24 hours.
The well, named Barclay-TH 295 106A, aims to reach a total depth of approximately 800 feet to test the Lyons Sandstone formation. The operation is expected to take one day to set surface conductor casing and then proceed to the planned depth. Once reached, gas will be tested for various concentrations, including helium, and wireline logging will be conducted to assess reservoir and gas/fluid properties.
The Vecta Project, where Mosman holds a 20% working interest and is operated by Vecta, is near the Red Rocks helium field and Blue Star Helium’s Galactica project. Notably, helium concentrations of up to 11% have been reported in nearby wells and fields, indicating a promising area for development.
Under the terms of the new agreement, Vecta will retain operatorship at no cost to Mosman in exchange for a 10% carried interest. Moreover, Mosman reserves the right to assume operatorship and Vecta has the option to buy back in for four times the drilling costs. No payments by Mosman are required until July 2025, and the company maintains a 20% interest in the other four AMI areas.
Andy Carroll, CEO of Mosman, expressed optimism about the drilling, citing the well’s strategic location in a proven helium development area and the potential for discoveries to benefit from low drilling costs and existing infrastructure, including a helium plant approximately 100 miles north.
This development, as disclosed by the company, is considered inside information under the Market Abuse Regulations and has now entered the public domain with this announcement.
The information for this report is based on a press release statement.
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