It's déjà vu all over again for investors in Mosman Oil and Gas Ltd (AIM:MSMN) which today announced a deal to increase its stake in a helium well being drilled with partner Vecta Oil & Gas.
Mosman will now own a 90% interest in The Bard well, in Colorado, up from 20%, with the AIM-quoted company committing to pay 100% of the well costs.
It struck a similar deal for Billy Goat, the previous well in the Vecta joint venture, before trading off the increased stake to private American company Desert Eagle Operating LLC in exchange for a 5% royalty over the well’s future revenues.
In the Billy Goat transactions, Mosman upped its stake ahead of drilling, bearing the well costs, and dealt-down its stake before the detailed well results were known.
Billy Goat delivered a positive initial well result.
At The Bard, drilling had already begun and had paused due to weather disruptions.
Today, Mosman added that the rig crew has now returned and drilling is expected to start shortly.
Mosman and Vecta have three more wells in their agreed joint venture and the AIM-quoted firm (currently) owns 20% of each of them.
"I look forward to the results of each of these wells as they are sound geological prospects in an area that has helium production and access to markets,” Mosman chief executive Andy Carroll said.
Desert Eagle, meanwhile, owns and operates nearby helium facilities.