Mosman Oil and Gas Ltd (AIM:MSMN) has signed an agreement to dispose of its EP-145 in Australia to ASX-listed Echelon Resources.
The net proceeds combined with planned expenditure on EP-145 in 2025 that will no longer be incurred are estimated to be circa A$3 million.
The binding heads of terms with Echelon are the sale of 100% of EP-145 for A$400,000 in cash and a 5% helium and hydrogen royalty.
The A$400,000 will be used to progress helium exploration in the US projects.
Andy Carroll, Mosman's chief executive, said: "We have taken a commercial decision to focus our capital allocation and future operational activities on our US projects.
“While EP-145 in the Amadeus Basin has helium potential, the US has the considerable commercial advantages of a proven helium production basin, lower drilling and operating costs, ready availability of services, production infrastructure and access to markets.
“We are pleased to retain ongoing interests in helium potential in EP-145 with a royalty interest which does not require any expenditure by Mosman.
"This transaction, once completed, restores Mosman to being fully funded for all exploration commitments in the next 12 months, and with funding available for discretionary exploration activities."