Mosman Oil and Gas Ltd has announced a significant step in reshaping its helium portfolio strategy with the execution of a royalty agreement designed to unlock value from the Billy Goat helium project, part of its Vecta venture in Colorado, USA. Under the deal, the AIM-listed energy company will exchange its direct working interest in the project for a 5% overriding royalty interest (ORRI) on future revenues, ensuring a stream of income while freeing up capital and operational resources.
The agreement, struck with Colorado-based operator Desert Eagle Operating LLC, allows Mosman to maintain a long-term financial interest in the high-potential helium project without any future capital commitments or exposure to operating costs. Desert Eagle will acquire a 92% working interest in Billy Goat, with Vecta Oil and Gas, Mosman’s joint venture partner, retaining an 8% stake.
“This arrangement with Desert Eagle is the best way for Mosman to commercialise our interest in the Billy Goat asset,” said Mosman chief executive Andy Carroll. “It provides us with future revenue upside while allowing us to redeploy capital into near-term drilling opportunities and the development of core assets like Sagebrush.”
Helium, a critical gas used in medical imaging, semiconductors, aerospace and other high-tech industries, has seen renewed investor interest amid growing concerns over supply constraints and geopolitical risk. As global demand rises, exploration and production efforts, particularly in the United States, have accelerated.
The Billy Goat lease, located in a helium-prolific region of Colorado, represents a potentially valuable asset for Mosman. By securing a 5% royalty, the company can now capitalize on any commercial success achieved by Desert Eagle while preserving capital for more strategic initiatives.
Importantly, the agreement includes a reversion clause. Should Desert Eagle fail to commence the permitting process for one or more wells within six months, the project will revert to its previous owners, with Vecta and Mosman reclaiming 70% and 30% interests respectively.
“Desert Eagle and its affiliates are well-known helium specialists in the region, with a strong track record in delivering production and managing logistics,” added Carroll. “Their involvement significantly de-risks the project and ensures that Billy Goat has the best chance of moving forward efficiently and effectively.”
With the Billy Goat divestment finalised, Mosman is intensifying its focus on active exploration and development within the rest of its U.S. helium portfolio. The company retains a 20% interest in four additional Vecta project areas: The Bard, Garcia, Treasure Hill and Mona Loa.
Drilling at The Bard is expected to begin on June 2, marking a new phase of on-the-ground activity that could generate further near-term catalysts for the company. These upcoming wells represent what Mosman sees as a more immediate opportunity to deliver value.
In parallel, Mosman is continuing to advance its wholly owned Sagebrush helium project, which it views as a cornerstone of its future helium strategy. The additional capital unlocked from the Billy Goat transaction is expected to support continued development work at Sagebrush, including permitting and potential drilling activity.
The royalty deal exemplifies Mosman’s broader strategic shift toward disciplined capital management and value-driven decision-making. Amid a volatile commodities landscape, the company is aligning its portfolio around projects that offer higher returns on investment with manageable risk profiles.
“By transitioning from working interest to royalty at Billy Goat, we’ve secured a pathway to revenue while significantly improving capital efficiency,” Carroll said. “This gives us the flexibility to pursue other drilling prospects and accelerate the development of assets that offer greater control and upside.”
As helium’s strategic importance grows and pricing remains robust, Mosman’s recalibrated focus on lower-risk revenue participation and targeted development appears well-timed. With activity ramping up across its U.S. portfolio, the company enters the second half of 2025 with momentum and a streamlined path forward.