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(Alliance News) - Shares in Mosman Oil & Gas Ltd sank after the company announced GBP300,000 placing offer, but the company said that the proceeds were required for two northern Australian licences.
Mosman is an oil exploration, development, and production company with projects in the US and Australia. Shares in Mosman were down 21% to 0.014 pence each in London on Friday morning.
The came after Mosman announces a successful fundraise for GBP300,000 through the placing of 2.40 billion shares at 0.0125p each. The issue price represents a discount from Mosman's closing price of 0.016 pence per share on Thursday. Mosman expects the new shares to be admitted to trading on AIM on February 8.
Mosman said that the proceeds will go into funding the development of the company's two 100% owned helium and hydrogen exploration project's in Australia's Amadeus Basin, EP 145 and EP 155.
Mosman remains responsible for the costs of EP 145, which will be reimbursed by its farm-in partner upon completion and paid AUD160,000, around USD106,000.
In October, Mosman signed a farm-in agreement with Greenvale Energy Ltd subsidiary Greenvale Gold Pty Ltd, to fund seismic and drilling on EP 145. Mosman will retain a 25% working interest in EP 145, while Greenvale will earn a 75% interest following completion. The farm-in remains subject to governmental and ministerial approval, which Mosman expects to receive in the near future.
The seismic drilling programme at EP 145 is planned for the first half of 2024, with results and well location to be announced by August.
At EP 155, Mosman has been involved in a farm-out agreement with Westmarket Oil & Gas Pty Ltd, a subsidiary of Georgina Energy, since 2020. Georgina remains responsible for the native title negotiations needed to secure an exploration permit, and will undertake the initial technical work programme. Once completed, Georgina will hold a 75% interest and operatorship of EP 155, with Mosman holding the remaining 25%.
On Thursday, Mosman shares were also hit by mediocre production results for the quarter ended December 31. Net production was down to 2,725 barrels of oil equivalent, or 30 barrels per day, from 3,564 the previous quarter. However, Mosman said that the downturn was caused by changes to production infrastructure at the Stanley project in Texas, which should facilitate even higher production rates in 2024.
By Hugh Cameron, Alliance News reporter
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