- Mosman Oil and Gas is reviewing all aspects of its strategy, not only for South Taranaki Energy Project (STEP), but also all expenditure for exploration on the company's other projects and corporate costs.

This review, set against a backcloth of oil prices below USD37/bbl, is on-going, the company said in an AGM statement.

The statement is given below:

"In late 2014, Mosman recognised that the fall in oil price from over USD 100/bbl would have a serious effect on global markets. In particular it was considered that the capital markets would be extremely challenging for a pure exploration company, but conversely that the fall may also provide opportunities to purchase quality production assets, thereby providing cash flow and a medium term sustainable business model.

"After reviewing a number of opportunities and actively pursuing some, including an unsuccessful takeover offer for MEO Australia, Mosman identified and, over a 6 month period, was able to reach agreement to purchase the South Taranaki Energy Project ('STEP') which is an attractive project as it is an existing producing asset in New Zealand with revenue from oil, gas and LPG, as well as having upside potential in the further development of the Manutahi oil field.

"That culminated in the signing of a Sales and Purchase Agreement on 3 September 2015. Since then, Mosman has been substantially occupied in progressing the acquisition of STEP, including contract negotiations, financing, identifying senior management, transition planning, discussions with relevant New Zealand government regulatory bodies and related matters.

"As the market has witnessed, Brent Oil has recently fallen below USD 37/bbl. The current market forward curve anticipates improving oil prices during 2016, however, near-term prices continue to show significant volatility.

"Given this pricing backdrop, the Board is very conscious that both the upstream oil sector and the equity market for junior oil and gas companies remains extremely challenging and therefore believes it has to be prudent when defining its 2016 forward strategy, objectives and financial commitments.

"Given the challenging oil price, Mosman is reviewing all aspects of its strategy, not only for STEP, but also all expenditure for exploration on the Company's other projects and corporate costs. This review is on-going."

At 10:29am: [LON:MSMN] Mosman Oil And Gas Ltd share price was 0p at 2.25p

Story provided by