Mosman Oil and Gas Ltd (AIM:MSMN) told investors it has upped its interest in the Billy Goat project area in Colorado, part of its partnership with Vecta Oil & Gas, to 90% from 20%.
To do so, the AIM-quoted small cap agrees to pay for 100% of upcoming well costs, estimated at be less than $200,000.
The agreement covers the planned Barclay-TH 295 106A well, where drilling is due to start within the next 24 hours.
Vecta will remain the project operator, and will retain a 10% carried interest. At the same time, Vecta also has a buy-back option which would allow it to repurchase the project stake ‘at four times the drilling cost’.
Four separate project areas will also be testing in the upcoming campaign, and Mosman still owns 20% of those.
Projects nearby have seen helium concentrations measured at up to 11%, Mosman noted.
“The drilling of this well is exciting given the excellent lease position in a proven area of helium development and production and we are pleased to have an increased interest in this well,” Mosman chief executive Andy Carroll said in a statement.
"Each well location has been carefully selected by the very experienced team at Vecta and we believe has an excellent chance of discovering helium.
In London, Mosman shares rose by 12% to 0.068p.