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Mosman Oil & Gas Ltd

  • BY: Andrew Hore |
  • POSTED: 14/01/2015 |

Shares in Mosman Oil & Gas Ltd have fallen to an all-time low of 5.88p each even though the oil and gas explorer has tried to reassure investors. 

Management appears confident that the takeover of New Zealand-focused oil and gas company MEO Australia will go ahead. Talks continue while the bid documents are being prepared but MEO has not recommended the offer yet. A rival merger deal with Neon Energy was pulled before Christmas and Neon is due to pay a $400,000 termination fee.

Mosman is offering one of its own shares for every 20 MEO shares.

Mosman does not believe that the oil price will stay as low as its current level and argues that there will be opportunities to buy up assets from companies that are in financial difficulties. MEO has around A$10m of cash as well as exploration assets.

Mosman is focusing on larger oil prospects that are more likely to be commercially viable. An approach has been made by a company wishing to farm-in to one of the New Zealand permits. There are plans to drill a well on the Murchison permit area, which is 100km north of the existing Petroleum Creek permit in New Zealand. Murchison could provide the fuel for gas-fired power generation on the South Island, which should not be hit by the decline in the oil price.

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