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LONDON (Alliance News) - Mosman Oil & Gas Ltd on Monday said it has cancelled its deal to acquire the South Taranaki Energy Project in New Zealand from Origin Energy Ltd due to the drop in the oil price.
Mosman said while the assets remain strong and have long-term development potential, at the current depressed oil price, the acquisition no longer meets its investment criteria.
Origin has agreed to repay the NZD500,000 deposit Mosman paid as part of the deal and all royalty agreements regarding the asset will be terminated.
"After months of work by the Board, staff and consultants on STEP, it is extremely disappointing that the state of the global economy and specifically the oil price has led to this outcome," said John Barr, Mosman's executive chairman.
Mosman shares were down 52% on the news to 1.15 pence, the worst performer in the AIM All-Share.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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