Failed New Zealand acquisition takes Mosman loss deeper

29th Mar 2016 14:33

(ShareCast News) - A failed acquisition in New Zealand led Mosman Oil & Gas deeper into the losses in the first six months of its financial year, with the firm working to assure the market of its continued viability in its interim results on Tuesday.The AIM-traded Australia and New Zealand-focused oil exploration and development company saw losses widen significantly in the six months to 31 December, to AUD 3.68m (£1.94m) from AUD 1.91m a year earlier.Mosman's planned acquisition of the South Taranaki Oil Project off Te-Ika-A-Maui (North Island) in New Zealand costing AUD 1.16m. Additional impairment expenses of AUD 1.46m added to the losses.The company's board described 2015 as a challenging year, with continued oil price weaknesses and volatile equity capital markets resulting in the board implementing a revised strategy and operational plan.That plan involved a shift of focus from one of exploration - including the drilling of three wells - to seeking and securing a production asset, which led to the firm signing a contract to acquire the South Taranaki project.The acquisition was cancelled as a result of the further deterioration in oil prices in late 2015 and early 2016."2015 was an incredibly challenging year for oil and gas companies including Mosman and its shareholders," said executive chairman John Barr."The [South Taranaki] acquisition looked to be transformational at the time of signing however the depressed oil price affected this significantly."Barr said the board remained resolute for a positive outcome for the future of Mosman, and was taking decisive action to ensure continued viability."Importantly, the board [is] continuing to evaluate the development opportunities within Mosman and additional opportunities that it has identified, which are now under active review, and shareholders will be advised if and when one of these opportunities crystallises," he concluded.