Mosman Oil and Gas Ltd (AIM:MSMN) told investors it has decided to exit the Falcon project, following a review of the asset which has not been producing for a year.
The company, in a statement, said it completed an evaluation on further workovers at the Falcon-1 well and determined not to invest additional resources.
It has agreed to transfer the Falcon lease to 84 Energy Corp in exchange for the equipment on the lease. This means Mosman is not liable for potential future abandonment costs estimated to be up to US$200,000.
Additionally, it noted that the undeveloped Galaxie exploration lease has not been renewed and has expired with no liabilities.
"Mosman's priority areas in Texas continue to be at the Cinnabar and Stanley projects, and this transaction enables the team to focus on building production at these higher value areas,” said technical director Andy Carroll.
Falcon previously generated AU$636,387 in revenue and a gross profit of AU$286,528 in the year ending 30 June 2022 and on the books had a carrying value of AU$471,730 which will be written off in the end of financial year accounts.