Mosman Oil and Gas Ltd (AIM:LON:MSMN) recently acquired an 82.5% stake in the Sagebrush helium project in Colorado, strengthening the company’s helium exploration portfolio in the US.
The Sagebrush project is adjacent to Mosman’s Coyote Wash project, creating opportunities for operational synergies.
CEO Andy Carroll, in an interview with Proactive, described Sagebrush as a prime exploration area with proven helium sources and existing oil production infrastructure.
Here, we take a closer look at what was said.
Proactive: Andy, great to speak with you. You’ve announced that you've acquired an 82.5% stake in the Sagebrush helium project in Colorado. So, really expanding your helium footprint there?
Andy Carroll: We are very excited about this area. We have done a full technical review of where we wanted to be in the USA, and this area stands out.
The area was identified about ten years ago by Tim Rynott, who started a company called Four Corners Helium because he identified the potential here.
He was an early explorer focusing on helium. This area is particularly attractive for both the geology—and we've outlined that in our research—but primarily because there’s definitely a source.
That’s proven through this area, and there’s a great seal as well, which is essential for trapping the helium.
I think we're very fortunate that there is extensive seismic data across this area. We’re able to identify targets, structures that could hold significant amounts of helium, and a reasonable number of wells that have been drilled, which help identify the geology.
This is a prime exploration area. One reason it hasn’t been explored and developed before is that it’s tribal land, and it took Tim quite some time to establish good relationships with the Ute Mountain Ute Tribe.
The tribe provided Tim with the seismic data in return for him doing an extensive report on the helium potential of this area.
We’re now working with Tim and Four Corners and are very pleased to have both the Coyote Wash project and the Sagebrush project. The two areas are side by side and complementary.
Proactive: What makes this Sagebrush acquisition significant?
Andy Carroll: The latest acquisition, which we intend to complete in January, is held by production. This means the leases were established, wells were drilled in the shallower zones, and they produce oil, which still provides steady production. That basis has established the leases and production infrastructure.
There’s also something underneath the shallow oil production—great helium exploration potential.
Some wells have drilled below the salt seal and into the helium reservoirs, and non-flammable gas has been tested. Unfortunately, it wasn’t tested for helium, but we’re confident there will be helium based on other data in the area.
This Sagebrush project complements the Coyote Wash project. They’re geographically adjacent.
At Coyote Wash, we’ve identified seismic targets, and we’re already putting together technical data from the two areas to develop a forward exploration plan. We’ve started work on this and will share more in the near future.
Proactive: How do these projects fit into your overall helium strategy?
Andy Carroll: We’ve taken what we believe is a mature approach to building a helium-producing company by creating a portfolio of exploration projects.
Our man in the US, Howard McLaughlin, has extensive experience and has led this effort. Exploration is inherently uncertain, so we’re cautious. Rushing into drilling can lead to wasted capital.
Now, we have a very strong portfolio of high-potential areas. These two new projects complement the Vector project, also in Colorado, where we’ve experienced delays but expect to move forward soon.
In Australia, we’re waiting on final approvals for EP 145, which we now fully own.
Overall, we have a diverse range of projects, from held-by-production leases to early-stage permits, across proven helium regions in the US and Australia.
Proactive: Andy, I hope you’ll keep us posted on progress at all of those projects.