Mosman Oil and Gas Ltd (AIM:MSMN) has moved ahead in its transformation, to become a US-focussed helium-targeted explorer.
The AIM-quoted small-cap share price is up around 50% over the past month as investors buy into the explorer’s new corporate vision.
Formerly an investor in low-cost, low-volume, non-operated production in Texas and an early-stage and unproven exploration acreage in Australia’s Northern Territory, Mosman has recently reset its portfolio.
Now, it is building upon its initial venture in Colorado where it is preparing for a five-well campaign to test the area's helium potential.
It is the latest AIM-quoted small-cap to tread this particular path – with the likes of Helix Exploration, Helium One, Mendell, Ascent Resources, and 80 Mile gaining traction with investors who see the compelling story in the helium sector.
Helium is not a hydrocarbon, nor is it an energy commodity – but, it is very much a sought-after gas that due to its critical importance to key high-tech industries is particularly in demand in the United States.
Proven helium plays
As highlighted recently by Andy Carroll, Mosman's chief executive, the United States has a proven helium production basin, and thanks to its complementary onshore oil and gas industry infrastructure, has lower drilling and operating costs than frontier territories. It also means there is a ready availability of services, and the facilities to bring gas products to markets.
On Monday (Feb 3), Mosman completed the acquisition of a majority (+80%) stake in the Sagebrush exploration project in Colorado – which is seen as high-potential helium acreage near the Coyote Wash project area acquired by Mosman earlier in 2024.
The land package also benefits from legacy oil and gas production that is maintained and yields a supportive cash flow.
“It [Sagebrush] is held by production. This means the leases were established, wells were drilled in the shallower zones, and they produced oil, which still provides steady production.
“That basis has established the leases and production infrastructure. There’s also something underneath the shallow oil production—great helium exploration potential.
“Some wells have drilled below the salt seal and into the helium reservoirs, and non-flammable gas has been tested. Unfortunately, it wasn’t tested for helium, but we’re confident there will be helium based on other data in the area.”
Carroll added: “At Coyote Wash, we’ve identified seismic targets, and we’re already putting together technical data from the two areas to develop a forward exploration plan.”
Five wells on the way
News last week that a rig contract was now in place for the Vecta helium project, in another part of Colorado, provided investors with a trigger to buy into the speculative play.
Mosman last Thursday announced its 20%-owned Vecta Oil & Gas had now inked a contract with rig contractor Desert Eagle Operating which is now preparing to start drilling “as soon as possible”.
It’s expected that a five-well campaign will soon kick off across the exploration held by Vecta in Colorado’s Las Animas county.
Such near-term value catalysts have caught the imagination of investors in London, who will be keen to see Moman continue what appears to be a successful reinvention.
Clearly, attention will be on Mosman in the coming weeks as its US helium projects continue to progress.