25th Aug 2015 14:23
LONDON (Alliance News) - Mosman Oil and Gas Ltd on Tuesday said it has proposed to buy, together with a partner, producing oil and gas assets in New Zealand, including the Rimu, Kauri and Manutahi fields, from Origin Energy Ltd for NZD10 million, equivalent to about GBP4.2 million.
The deal is subject to Mosman entering into acquisition documentation.
Depending on funding, Mosman said it is expected to own a 40% interest in the project. It expects to contribute NZD4 million.
Mosman said it expects to partner with a privately owned independent oil company, which will acquire the remaining interest in the project. It didn't name the potential partner.
The project is expected to be named the South Taranaki Energy Project.
"The proposed STEP Project is expected to be a transformational deal for Mosman as it is expected, upon agreement of the relevant documentation and completion, to deliver immediate production, reserves, facilities and cash flow," Mosman Chairman John Barr said in a statement.
"Numerous opportunities to increase production in the short term post completion have been identified and there is also significant upside production growth in the further development of the producing Manutahi oil field that has an identified oil originally in place figure of 30 million barrels," Barr said.
The company said: "The board of Mosman is well aware of the current oil price; volatility of oil price; and general equity market conditions." But it added: "The oil price has made quality assets available at a good price. This is possibly the best time to acquire reserves and production."
Mosman shares were up 8.1% at 2.84 pence Tuesday afternoon, having been trading lower prior to the announcement.
By Samuel Agini; [email protected]; @samuelagini
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