Mosman Oil and Gas Ltd (AIM:MSMN) has acquired a working interest (WI) in a helium project in Las Animas County, Colorado, in a first move to expand its helium portfolio.
Through the deal, Mosman will acquire a 10% stake in an oil and gas project operated by private company Vecta, which will own the remaining 90% WI.
The Vecta Helium Project includes around 48,000 leased acres in Colorado, with five identified helium prospects with a well on each of these prospects to be drilled in 2024.
Helium production in Las Animas County includes the historic Model Dome field while Vecta and several other companies are active in the area.
Vecta drilled the Sammons exploration well last year in an Area of Mutual Interest (AMI) arrangement with Blue Star Helium and discovered helium and carbon dioxide.
The consideration for the 10% WI is US$500,000 payable by Mosman in monthly instalments and to come from cash and proceeds from the realisation of oil and gas assets, said the statement.
Mosman added that it intends to fund its share of the exploration wells, estimated to cost c US$259,000 per well (gross) making its total investment US$ 630,000.
Andy Carroll, Mosman’s chief executive, commented: "We see great potential in helium, as demonstrated by our commitment and progress at EP 145 in Australia.
“We reviewed a number of opportunities and selected the Vecta Helium Project due to the proven presence of helium and the low cost of shallow exploration and production wells.”