Mosman Oil and Gas Ltd (AIM:MSMN) has agreed the sale of its interest in Nadsoilco LLC, which owns a collection of oil assets in Texas, in a deal worth up to $1.75 million.
The sale is structured with an initial cash payment of $1 million and potential additional payments totalling $750,000, contingent upon future production rates.
Nadsoilco LLC owns the working interest in the Stanley, Greater Stanley, and Winters leases in Polk County, Texas. The buyer, RCM Tech Solutions LLC, will assume operations of these leases.
Proceeds from the sale will allow Mosman to concentrate on its helium exploration activities.
Specifically, the funds will support the company's interests in the Vecta Helium Project in Colorado and other helium exploration and production opportunities, alongside its remaining oil and gas interests, particularly at Cinnabar.
"We are pleased to deliver on our goal of commercialising some of our existing portfolio of oil and gas assets by sale as we seek to take advantage of compelling opportunities for helium exploration,” chief executive Andy Carroll said in a statement.
"We see great potential in helium, as demonstrated with our commitment and progress at EP 145 in Australia and the newly acquired interest in the Vecta Helium Project in USA, due to the proven presence of helium and the low cost of shallow exploration and production wells.”
Carroll added: "This sale demonstrates our commitment to deliver on the corporate plan to focus on helium opportunities, where we are able to leverage our helium exploration expertise gained over several years in Australia to identify quality helium projects.
"Looking ahead, Mosman will continue to commercialise its oil and gas assets and seek opportunities for helium and hydrogen projects."
Mosman noted that the sold assets generated net revenue of AU$1,603,090 (US$1,056,163) and a net profit of AU$418,876 (US$271,262) last year. On Mosman's balance sheet they had an asset valuation of AU$3,041,673 (US$2,003,945).