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Mosman chief has confidence for 2016

Published: 12:29 22 Dec 2015 GMT

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Mosman says it has some confidence in 2016 after a tough year for the sector..

John W Barr, executive chairman of Mosman Oil & Gas (LON:MSMN), will tell tomorrow's AGM, he is looking forward with "some confidence" to 2016, despite the sector being hit hard this year with price falls and a depressed equity market.

The firm said it continues to make progress with its agreement to buy the producing South Taranaki Energy Project (STEP) in New Zealand, although various factors mean the transaction may not ultimately go ahead.

One is that if Brent stays below US$40 a barrel for 15 consecutive days, it could prompt a review of the SPA (sales and purchase agreement) and potentially a termination.

Also, the acquisition remains subject to consents from two government departments, which if not satisfied by the end of January, unless extended by the mutual consent of all parties, could lead to the cancellation of the deal.

Elsewhere, Mosman recently received a 12 months suspension and extension approval for one of its licences in the Amadeus Basin in Australia and it will use the additional time to plan the next phase of exploration on the licence, EP145.

And it decided to cancel its option to acquire interests in Australia’s Canning Basin, in order to prioritise the STEP deal.

Barr will tell shareholders: "With a current cash balance of over A$5 million Mosman retains a varied portfolio of opportunities, but we are mindful of how best to progress these until we see a more robust oil price environment."

Mosman shares lost 16.67% to stand at 1.875p.

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