Mosman exits Vecta Helium Project after poor drilling results, shifts focus to promising Colorado assets with minimal financial loss.
Following its announcement on 27 June, Mosman Oil and Gas Limited has officially declared the termination of its drilling campaign at the Vecta Helium Project due to underwhelming results from the initial three wells. The campaign had aimed to explore the helium-rich Lyons formation, targeting depths between 1,200 and 1,500 feet across three primary areas: Billy Goat AMI, BARD AMI, and Garcia AMI.
However, both the BARD and Garcia wells encountered the Lyons formation at greater depths than anticipated. These wells also revealed water-wet conditions at the formation’s top, and, critically, failed to identify any structural traps that were previously predicted using surface mapping. These unexpected outcomes underscore a significant geological challenge: surface mapping has proven unreliable in this particular region, which lacks both seismic data and modern subsurface logs, making accurate predictions of subsurface structures difficult.
As part of its prior agreements, Mosman had strategically managed its financial exposure. For the Billy Goat AMI, the company relinquished its cost obligations in exchange for a royalty on any future revenue, a move executed before the well results were available. This effectively meant Mosman bore no cost for the Billy Goat AMI. In contrast, it funded 100% of drilling costs in the BARD AMI and 20% in the Garcia AMI. Importantly, the two remaining planned wells in the campaign will not incur any further financial obligations for Mosman, allowing the company to withdraw with minimal economic impact.
The total expenditure Mosman incurred for the entire drilling programme amounted to US$214,931. Although the Lyons formation has historically shown helium concentrations ranging between 2-3%, with peaks up to 11%, the gas present is typically low-pressure (less than 40 psi) and yields low flow rates. These characteristics make it economically unviable unless helium concentrations are significantly high, due to the extensive number of wells required for any commercial-scale development.
Given these results, Mosman has made the strategic decision to withdraw from the Vecta Project, thus limiting its involvement in this high-risk exploration area. This aligns with the company’s revised operational focus.
Howard Mclaughlin, Interim CEO of Mosman, expressed appreciation to the company’s partners for facilitating an early exit with limited cost exposure. He further emphasized Mosman’s renewed focus on more promising ventures, stating:
“We now look forward to focusing our efforts on the larger opportunities at our Sagebrush and Coyote Wash helium projects in Colorado, where we see significant potential for growth.”
