27th Aug 2014 10:36
LONDON (Alliance News) - Mosman Oil & Gas Ltd Wednesday said it has agreed to acquire OilCo Pty Ltd, a subsidiary of High Peak Royalties Ltd, as it looks to continue its strategy of developing its oil and gas assets in Australia and New Zealand.
"With Mosman's strategy to develop oil and gas assets in Australia and New Zealand, this opportunity and commercial terms fit well within our stated growth strategy. The OilCo assets in the Amadeus Basin provide a natural complement to Mosman's Australian exploration assets and are located in a prospective region that is experiencing a surge in exploration and development activity," Chairman John Barr said in a statement.
OilCo holds exploration permit EP156 on which a number of prospective leads have been outlined by independent consultants SRK Consulting (Australasia) Pty Ltd, and exploration permit application EP(A)155 in the Amadeus Basin in Australia, according to Mosman.
Mosman said that EP156 and EP(A)155 go well with Trident Energy Ltd's permit, EP145. Mosman is currently in the process of acquiring Trident. Mosman said its holdings in the Amadeus will cover a total of 5,458 square kilometres following the acquisition of Trident.
The AIM-listed company said it will assume and fund the 2014 minimum work requirement for EP156. This includes a gamma ray survey, gamma ray logging, and outcrop mapping and sampling. The minimum work requirement must be completed before November 6, 2014. According to Mosman it previously had an estimated expenditure of AUD425,000.
Mosman will also reimburse High Peak Royalties AUD10,000 for the guarantee previously lodged with the Minister for Mines and Energy in respect of EP156, in compliance with section 79 of the Petroleum Act. In addition, High Peak Royalties has been granted a 2% gross overriding royalty on all recovered petroleum from both EP156 and EP(A)155.
For the eleven months ended May 31, 2014 OilCo had an unaudited net asset value of AUD730,000 and a total comprehensive loss for the period of AUD5,445.
Mosman also said that Andy Carroll, one of its directors, has a 4.7% stake in High Peak Royalties, making the deal a related party transaction.
"The directors of Mosman, other than Andy Carroll, having consulted with ZAI Corporate Finance Ltd as nominated adviser to the company, consider that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned," Mosman said.
Mosman shares were Wednesday quoted down 2.4% at 22.70 pence.
By Samuel Agini; [email protected]; @samuelagini
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