Business
Planned Cinnabar Development Drilling and Placing
Planned Cinnabar Development Drilling and Placing.
About this update from Quantum Helium Limited
[{"type":"text","content":"\n \n 10 May 2022\n \n \n Mosman Oil and Gas Limited\n \n \n \n (\"Mosman\" or the \"Company\")\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Planned Cinnabar Development Drilling and Placing\n \n \n \n \n \n Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development, and production company, announces a £1.1 million conditional placing to fund the drilling of the first re-development well in the Challenger Project in Texas, of which Mosman has a 97% working interest.\n \n If the targeted production rates are achieved, Mosman Net Production could increase 88% from 130 boepd (as reported for quarter ending March 31, 2022) to circa 245 boepd.\n \n \n \n Placing\n \n \n \n \n In order to fund the planned drilling and anticipated completion costs at Cinnabar, the Company has raised £1.1m (before expenses) by way of a placing of 1,375,000,000 new ordinary shares of no par value in the capital of the Company (\"Placing Shares\") through the company's broker Monecor (London) Ltd, trading as ETX Capital, at a placing price of 0.08p per share (the \"Placing Price\") (the \"Placing\"). Investors are also receiving a one for two warrant exercisable at a price of 0.16p with a term of 24 months, 687,500,000 warrants are being issued in aggregate (the \"Placing Warrants\").\n \n Based on current production rates and current oil and gas prices the Company is currently operating above cashflow breakeven (not including major capital costs such as EP145 seismic, larger workovers that are not yet planned, and other potential drilling at Cinnabar if the first well is a commercial success).\n \n That situation will be further improved with a successful well at Cinnabar.\n \n This means that the Placing will allow for the drilling and development at Cinnabar and, based on a successful well, is expected to provide sufficient working capital for the next 12 months.\n \n \n \n The Challenger Project and Cinnabar Lease\n \n \n The Challenger Project is focused on the Cinnabar Lease, a 348-acre lease Held By Production. This area was originally drilled in 1989 by Ballard Exploration on Atlantic Richfield Company leases and has produced oil and gas from Wilcox sands since then. Mosman acquired 97% of the lease in 2020 and agreed to farmout 12% with Contour E...