28th Jul 2015 09:28
LONDON (Alliance News) - Mosman Oil and Gas Ltd shares dropped on Tuesday after it said it has been chosen as the "preferred purchaser" of a producing oil field and said it has conducted a related share placing to raise GBP400,000.
The oil and gas company also said it has appointed Jarrod Travers White as its new chief financial officer and said Company Secretary Zane Lewis is stepping down from his role.
Mosman Oil shares were down 19% to 2.42 pence per share on Tuesday morning.
In May, the company said it was in talks about potential acquisition opportunities, and said one opportunity has moved to an "advanced stage", whereby it has been chosen as the preferred bidder by the vendor, which has not been named. The acquisition will cost the company GBP4.2 million.
"The proposed transaction fits Mosman's strategic objectives and would provide immediate production and cash flow on completion, which would clearly be transformational," said the company.
The acquisition would lead to Mosman operating an onshore project with oil and gas producing fields. The fields have reserves and resources of around 8.0 million barrels of oil equivalent, and the project is currently produced 351 barrels of oil equivalent per day in 2014 after falling from 556 barrels per day in 2013. The project also has related infrastructure and processing facilities.
"Due to contractual confidentiality restrictions at this stage, the full project's details and the identity of the vendor cannot be disclosed until a sale and purchase contract is formally signed by the relevant parties," said Mosman.
Mosman has been granted a period of exclusivity to finalise the sale and purchase agreement and to arrange finance to pay the 10% non-refundable cash deposit, which has now been raised after the company conducted a placing.
In parallel, Mosman is finalising an agreement to divest a significant percentage of the project while retaining operatorship. Mosman is seeking to retain 40% of the project.
"The Mosman board believes the sale and purchase contract will be signed in the coming weeks, and final payment and completion will occur in a few months," said the company.
The potential acquisition does not alter the previously announced operational plans for Mosman's extensive portfolio of existing exploration permits, it added.
The related placing, which will be used to progress the deal and for working capital, comprised of 22.9 million shares at 1.75 pence per share to raise GBP400,000.
Incoming CFO White is a chartered accountant and a director of Traverse Accountants Pty Ltd, a corporate advisory and chartered accountancy firm. He also has held the title of company secretary and chief financial officer of "several other listed entities" on the the Australian Securities Exchange.
Company Secretary Lewis is stepping down, but the company did not state when he officially will leave the company or any information regarding his replacement.
By Joshua Warner; [email protected]; @JoshAlliance
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