(Sharecast News) - Explorer and producer Mosman Oil and Gas confirmed a potential partnership for helium production in Australia's Amadeus Basin on Monday.
The AIM-traded firm said that after a recent communication on its Twitter account, it was clarifying that on 27 April, it executed a non-binding heads of agreement with Beijing Sinoscience Fullcyro Technology Co (Fullcyro) and Beltway Group (Beltway).
It said that while the agreement was not binding, it established a formal relationship and would serve as a framework for future agreements.
The agreement outlined several key points of collaboration between the three companies, with the first being
Fullcyro and Beltway agreeing in principle to purchase 80% of the liquid helium production from Mosman's exploration block EP 145, starting from the wellhead.
Secondly, Fullcyro and Beltway would provide Mosman with the necessary equipment for helium production, and thirdly they could offer financial support to Mosman if it is required for the project.
Lastly, the parties involved anticipated further formal agreements for engineering, procurement, construction, finance and offtake before moving forward with production.
"Before a more formal offtake agreement can be finalised, EP 145 requires further exploration, including seismic and drilling, and then following a reserve estimate, production planning and a decision to undertake a commercial development," the Mosman board said in its statement.
"No such commercial development plans are in place at this stage and will be subject to a number of material matters including successful exploration, funding and regulatory approvals.
"Mosman cautions that there can be no certainty that formal agreements will develop from the heads of agreement and notes that at this stage there are many matters to agree including pricing, costs, the terms of any financial support or other material matters which will form the basis of any future formal agreements with Fullcyro and Beltway."
At 1628 BST, shares in Mosman Oil and Gas were down 2% at 0.03p.
Reporting by Josh White for Sharecast.com.
Mosman Oil Gas (MSMN)