SYDNEY – Mosman Oil and Gas Limited (AIM: MSMN) has announced the sale of its EP-145 asset as part of a strategic shift towards helium exploration and production in the United States. The company has entered into an agreement with Echelon Resources Limited (ASX:ECH) to sell 100% of the EP-145 license for A$400,000 in cash, retaining a 5% share of the helium and hydrogen royalties.
The decision to sell the EP-145 asset, located in Australia’s Northern Territory, was influenced by several factors, including increased drilling costs, estimated at around A$20 million, and increased regulatory scrutiny following community concerns about fracking. In contrast, Mosman’s US projects, specifically the Sagebrush and Coyote Wash projects in Colorado, offer more favorable conditions for helium exploration with existing production infrastructure, moderate drilling costs and no prescribed expenditure obligations.
Mosman chief executive Andy Carroll said the US projects have “significant commercial advantages” over EP-145, including a proven helium production pool, lower operating costs and easier access to services and markets. Proceeds from the sale, together with planned cost savings for EP-145, are expected to be approximately A$3 million, which will support the company’s helium exploration efforts in the US.
The transaction is subject to customary conditions, including a formal purchase agreement and government approvals, which are expected to take several months. The company also completed the acquisition of the remaining 75% stake in EP-145 from Greenvale Energy Ltd (ASX:GRV) as previously announced on 15 October 2024.
According to Mosman’s recent portfolio review, the Sagebrush project is currently producing approximately 40 barrels of oil per day and has identified potential for further oil and helium exploration. The Coyote Wash project, near Sagebrush, also shows high helium potential based on seismic data.
The disposal of EP-145 marks a significant step in Mosman’s strategy to concentrate on its US assets. Carroll expressed confidence that the transaction will leave Mosman “fully funded for all research commitments over the next 12 months, and with funds available for discretionary research activities.” The move is based on a press release from Mosman Oil and Gas Limited.
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