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(Sharecast News) - Mosman Oil and Gas announced the completed sale of its EP-145 permit in Australia's Amadeus Basin to Echelon Resources on Friday, receiving proceeds of AUD 0.44m (0.21m) including goods and services tax.
The AIM-traded firm said the transaction also transferred title of the asset to Echelon, which is listed on the ASX.
As part of the agreement, Mosman said it retained a 5% royalty on future helium and hydrogen production from the permit.
The company also secured an option to re-acquire any part of EP-145 should Echelon choose to relinquish exploration or production in the area.
Echelon was reportedly planning to conduct high-resolution 3D seismic surveys and drilling activity aimed at appraising the West Walker-1 gas discovery, with a view to connecting future output into the Northern Territory gas market.
The permit lies within Echelon's core operational area, adjacent to the Mereenie gas field.
Mosman said proceeds from the sale would support exploration and appraisal work in its US portfolio.
It said the transaction also relieved the company of an estimated AUD 2.5m in near-term exploration expenditure obligations tied to the EP-145 work programme.
"Completion of the sale of EP-145 provides funding to support the ongoing appraisal and exploration at Mosman's priority projects in the US which have proven helium resources, located near existing helium production with access to infrastructure and to markets," said chief executive officer Andy Carroll.
"We are pleased to retain a 5% royalty interest in EP-145's helium potential at no cost to Mosman, with the potential to re-acquire that acreage with the benefit of further exploration activity having been conducted in EP145 in the interim."
At 1308 BST, shares in Mosman Oil & Gas were up 5.82% at 0.05p.
Reporting by Josh White for Sharecast.com.
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