HOUSTON – Mosman Oil and Gas Limited (AIM: MSMN) has announced the acquisition of an 82.5% working interest in a 10,000-acre helium and hydrocarbon lease in Colorado known as the Sagebrush Project. The lease, currently producing oil, is sustained by production from seven active wells and is located adjacent to the Company’s Coyote Wash Project.
The Sagebrush project, managed by the Ute Mountain Ute Tribe, is seen by Mosman as a strategic extension of its helium exploration and development initiatives. The acquisition, completed through Mosman Helium LLC, includes a cash transaction of $630,000 from the company’s existing reserves.
The transaction, which is pending due diligence and standard approvals, is expected to become effective on January 1, 2025, with a completion date scheduled for January 31, 2025. Mosman will also assume lease management.
According to technical studies, the Sagebrush project area contains the geological elements necessary for helium accumulation, including a proven source of helium in igneous bedrock, an effective salt seal, and the Leadville and McCracken formations as reservoirs. In addition, seismic surveys have identified several undrilled structures with the potential for significant amounts of helium.
Current gross oil production at Sagebrush is approximately 40 barrels of oil per day (bopd). The lease also has a history of steady oil production with minimal decline, providing a revenue stream while retaining acreage for further exploration.
Mosman’s director of US operations, Howard McLaughlin, has independently agreed to take a 10% stake in the Sagebrush project for $70,000, reflecting the same cost ratio as Mosman.
Andy Carroll, CEO of Mosman, emphasized the acquisition’s alignment with the company’s strategic shift towards helium exploration and stated that the Sagebrush project, along with the Coyote Wash project, represents the fulfillment of their acquisition targets set during the September 2024 capital raise.
The Sagebrush well, drilled in 1984, produced oil above the salt bed and nonflammable gas below, although helium was not tested at the time. The well’s initial production was over 600 barrels per day, contributing to a cumulative production of over 300,000 barrels of oil from the nine wells.
For the 82.5% interest in the Sagebrush project, net earnings before income taxes for the twelve months ended June 2024 were approximately $286,000, after accounting for royalties, local taxes and operating expenses.
This expansion of Mosman’s helium exploration portfolio is based on a press release and reflects the company’s wider diversification strategy within the helium and hydrocarbon sectors.
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