RNS9 Nov 2018 10:55
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, is pleased to announce it plans to continue the rapid development on its US projects by proposing up to five new wells, all located onshore in Texas, USA in 2018/19.
The five wells proposed are: Stanley-2, Stanley-3, Stanley-4, Champion-1 and Challenger-1.
The Stanley-2 development well is already funded, and the other Stanley development wells are now funded, and will be drilled under the lease operating agreement, where one drilling operation can be proposed and completed at a time, so this is likely to be one well every two months. The final drilling timetable is dependent on the operator decisions, and logistical matters which are not entirely in Mosman's control at this time.
The first well (Stanley-2) is targeting the Yuega sands identified in the logs when drilling the Stanley-1 well is expected to commence drilling in late November and the results are expected in mid December.
The Champion and Challeneger proposed wells still require funding, and several alternatives are being considered.
All these wells will be drilled as part of the Strategic Alliance with Baja Oil and Gas LLC ("Baja"), and will be supported by Baja's interpretation of 3D seismic data, integrated with existing sub-surface well control, and legacy production information, similar to the successful Stanley-1 well which is now on production.
These wells are expected to increase Mosman's production and thus revenues, and therefore a decision to increase the proposed drilling has been made by the Board. The decision is fundamental to Mosman's medium term objective of becoming profitable at a corporate level.
Details of the Fundraising and Proposed Subscription of £500,000
To fund the drilling, the Company has raised £390,000 (before expenses) by way of a placing of 141,818,182 new ordinary shares of no par value in the capital of the Company ("Fundraising or Placing Shares") at 0.275p per share plus a 1 for 2 warrant exercisable at 0.4p per share (the "Warrants"). The Warrants will be exercisable within 24 months of issue.
In addition to the Fundraising, two Directors have indicated their intent, to subscribe for up to £110,000 (approximately AUD 198,000) (the "Proposed Subscription") on the same terms and conditions as the Placees to demonstrate their ongoing commitment to the Company.
The Directors are unable to currently participate in the Fundraising as the Company is in a closed period by virtue of the imminent publication of the 2018 Annual Report.
The Proposed Subscription, and the final terms of the Proposed Subscription, which would be subject to AIM Rule 13 Related Party Transactions, will be conditional upon completion of all necessary regulatory approvals. Assuming those approvals are received this would lead to the issuance of a further 40,000,000 shares plus a 1 for 2 warra
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