Mosman Oil and Gas rallies as it sells royalty to help fund acquisition

15th Sep 2015 10:02

(ShareCast News) - Mosman Oil and Gas has sold a royalty to help fund its proposed acquisition of up to a 70% interest in the South Taranaki Energy Project.Mosman said it has agreed to sell a 2% royalty to Canada-based Ridge Royalty Corp for NZ$4m, or around £1.68m. As well as the STEP royalty, the company has granted Ridge a right to first refusal for a two-year term to acquire similar royalties on its ten other current oil and gas projects in Australia and New Zealand.It said the sale provides funding for 40% of the purchase of STEP and does not involve any share dilution or debt. In addition, the company is also actively negotiating other funding alternatives to finance the balance.Chairman John W Barr said: "We are delighted to have secured a large proportion of the funding for the STEP Acquisition, one which the board sees great value in and believes will be transformational for Mosman. "The total consideration for the STEP acquisition is NZ$10m, or around £4.2m to be paid in two tranches following the 5% deposit which was paid by Mosman in early September.At 1026 BST, Mosman shares were up 21% at 7.85p.