Mosman Oil and Gas: Helium Catalysts Ignite Value in Undervalued Asset

The global helium market is on fire, fueled by surging demand from semiconductors, healthcare, and aerospace. Yet, one small-cap player—Mosman Oil and Gas (LON:MOM)—remains vastly undervalued despite owning high-potential projects in the U.S. heartland. With near-term cash flow from its Sagebrush project, advancing drilling timelines at Vecta, and seismic breakthroughs at Coyote Wash, Mosman is positioned to unlock trapped value. Here's why investors should take note.

Sagebrush: A Cash Flow Beacon in a Volatile Sector

Mosman's Sagebrush project in Colorado, U.S., has become a rare revenue generator in the helium sector. Starting in January 2025, the project delivered its first monthly revenue of US$53,974, with sales volumes rising from four loads in January to six in February. This consistency is critical: Sagebrush is one of few helium-focused assets globally to report recurring revenue, a stark contrast to peers still in exploration mode.

The project's 82.5% working interest and proximity to existing infrastructure (e.g., the Pinon Canyon processing plant) reduce execution risks. Reprocessed 2D seismic data has also sharpened the team's ability to optimize well placement and identify new drilling targets.

Vecta: Delays Now Behind, Drilling Momentum Ahead

The Vecta project faced regulatory hurdles delaying its mid-April start, but progress is accelerating. A second well at the “Bard” lease area is mobilizing as weather permits, with drilling expected to begin in late May. The first well on the Billy Goat lease, targeting the helium-rich Lyons formation at 1,200 feet, is nearing completion.

Crucially, offset wells in the area, such as the Texaco Cynthia True-1, have flowed 8.8% helium, a concentration that, if replicated, could make Vecta one of the highest-grade U.S. helium assets. Mosman's 20% working interest in the Bard lease (soon to rise to 90%) ensures significant upside as drilling data emerges.

Coyote Wash: Seismic Reprocessing Unlocks New Prospects

At Coyote Wash, Mosman has reprocessed 3D seismic data to better define six large helium and oil prospects across the Leadville and McCracken formations. This work reduces geological uncertainty and could open drilling opportunities as early as 2026. CEO Andy Carroll emphasizes that Sagebrush's monthly revenues and Coyote Wash's progress provide a “rare combination of cash flow and growth.”

The project's 100% ownership also avoids profit-sharing complexities, a key advantage in a sector where joint ventures are common.

Valuation: A Deep Discount in a Bullish Market

Despite these catalysts, Mosman's shares trade at 0.025 pence—a 5.3% drop year-to-date—with a market cap of £9.42 million. This undervaluation contrasts sharply with sector tailwinds:

• Helium prices rose 18% in 2024 to $450/MCF, with further gains expected as supply tightens.
• The global helium market is projected to grow at a 6.7% CAGR to $7.5 billion by 2034, driven by semiconductors (now 24% of demand) and healthcare MRI machines.

Compared to peers like Pulsar Helium (LON:PULS), trading at a 10x higher valuation multiple, Mosman's shares appear deeply undervalued. Analysts at Spark note “financial instability” but acknowledge the company's strategic shift to helium—a sector where scarcity is structural.

Investment Thesis: Buy the Dip, Wait for the Catalysts

Mosman offers a compelling risk/reward profile:

1. Near-Term Cash Flow: Sagebrush's revenue stream reduces dilution risk and funds exploration.
2. Drilling Catalysts: Vecta's results (expected Q3 2025) could prove helium grades, unlocking multi-million-barrel equivalents.
3. Undervalued Assets: Coyote Wash and Sagebrush's resource delineation could re-rate the stock as peers trade at premiums.

Risk Factors: Weather delays, regulatory approvals, and global helium price volatility.

Conclusion

Mosman Oil and Gas is a classic “story stock” waiting for catalysts to unlock value. With helium demand set to soar and the company's projects advancing, now is the time to position ahead of the curve. For investors with a 3–5 year horizon, Mosman's low valuation and high-potential assets make it a compelling contrarian play.

The author holds no position in Mosman Oil and Gas. Always conduct your own research before investing.