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(Sharecast News) - Helium, hydrogen and hydrocarbon explorer Mosman saw its share price drop 10% on Thursday after the AIM-listed group stopped drilling at the part-owned Vecta Helium Project following disappointing initial results.
The company said that the drilling campaign at the Colorado project, which was targeting the helium-rich Lyons formation at depths of 1,200-1,500 feet, has now been terminated after results from the first three wells were not as expected.
The total cost of the drilling so far was just under $215,000, and with the remaining two planned wells incurring no cost to Mosman, it was able to exist the programme "with minimal financial impact and no further payments". Mosman has a 20% working interest at the project.
"The Lyons formation, a Permian-aged sandstone reservoir, typically contains helium percentages of 2-3%, with historical highs up to 11%. However, the low-pressure gas (below 40 psi) and resultant low flow rates require high helium concentrations to justify the extensive development wells needed for commercial viability," the company explained in a statement.
"Mosman's decision to exit the project reflects a strategic move to limit exposure in a high-risk exploration area."
Shares were down 10.2% at 0.022p by 1141 BST.
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