Mosman Oil and Gas Ltd (AIM:MSMN) shares rocketed more than 30% higher on Thursday after an independent assessment of the Sagebrush project, in Colorado, underlined a technically credible helium and natural gas resource with significant commercial upside.
The report, by consultant Sproule, estimated a gross prospective helium resource of 134 MMscf in the 'best estimate' case, whilst the overall range was 80 to 269 MMscf.
Giving the project an estimated value equivalent to around $40 million, with upside to around $80 million.
These prospective valuations are presently multiples above Mosman's market value on London's AIM market.
"This independent validation by Sproule ERCE is a very significant milestone for Mosman," said interim chief executive Howard McLaughlin.
He added, "Sagebrush is now confirmed as both technically credible and commercially attractive.
"While Sproule has applied conservative assumptions, we believe real reservoir performance will exceed the 2U outcome, consistent with producing Leadville reservoirs.
"With 3D seismic set to begin and extended flow testing later this year, Mosman is building strong momentum toward unlocking Sagebrush as a flagship development."
In London, Mosman shares soared to an intraday high of 0.042p immediately after the announcement, and by midday the shares were up some 32% at 0.33p.
Looking ahead, the exploration company is advancing plans to capture new seismic data, with the programme slated for October, with a view to obtaining a clearer picture of the subsurface and to identifying future target locations.
It is also planned that the Sagebrush-1 well will undergo extended flow testing, and well stimulation work is intended later this year as well.
At the same time, Mosman said it plans to advance surface facilities planning, including an assessment of options for gas processing and pipeline.
The shares rose 0.008 to 0.034.