News: Mosman Oil & Gas eyes opportunities to acquire distressed assets

Mosman Oil & Gas (LON:MSMN) is taking advantage of the oil price slump to acquire distressed assets and companies.

The company is currently looking to acquire MEO Australia (ASX:MEO, OTCMKTS:MEOAF) and, following a meeting with MEO’s management, Mosman says it continues to believe the combination will create a “strong, well-funded company”.

Mosman told investors that bid documents are currently being prepared and they will be lodged shortly.

MEO, according to public documents, had A$10 million in cash at the end of December and owns a number of assets in Australia and New Zealand.

In the meantime Mosman continues to advance its own projects in Australia and New Zealand, where it is preparing drill programmes for the coming year.

In February, the company plans to flow test the Cross Road-1 well which was drilled on the Petroleum Creek acreage last year.

Looking ahead, there are plans to focus on deeper and larger prospects within the Petroleum Creek and Taramakau permits in New Zealand. This follows a successful seismic program.

Elsewhere, drilling is planned for the Murchison permit once the permit commences in April.

Success at Murchison could be commercialised through gas fired power generation, and therefore would not be affected by oil prices, said executive chairman John Barr.

"The current oil price brings both challenges and opportunities. We have taken appropriate action including shifting the exploration focus to larger oil prospects and the new Murchison permit,” Barr said.

“The directors are very excited by the potential of this permit which includes both oil and gas/condensate potential demonstrated by seeps and discoveries.”

Drill plans could potentially be enhanced with the possible addition of a new partner.

Mosman has received an unsolicited approach to farm into one of its permits in New Zealand, and discussions are ongoing. The company added that the directors consider a partnership may be a means of maintaining a strong level of activity, whilst preserving cash.