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- Black Mountain Energy (BME) is selling its Half Moon prospect in the Permian Basin for $10.7 million
- The company bought the well in January for $3 million (US$2 million)
- In eight months the company added a million dollars of value to the well which hit hydrocarbons late last month
- The funds will go towards development of Valhalla, Black Mountain’s flagship project onshore Western Australia
- Shares are up 38.1 per cent, trading at 2.9 cents at 11:31 am AEST
Black Mountain Energy (BME) has announced a decision to sell its Half Moon prospect in the Permian Basin of the USA to Tap Rock Resources III for $10.7 million.
Tap Rock will obtain 100 per cent of the acreage rights from BME’s wholly-owned subsidiary, Seven Rivers Operating.
The purchaser will take off the Manzano MIA 64 FEE 2H well, while Black Mountain will retain its interest in the 8 Morrow wells which are both proven and developed.
The sale will fund Australian development and the company remains on the lookout for short-term value opportunities.
Half Moon has been sold off only 8 months after the asset was purchased back in January for A$3 million (US$2 million).
Only in late July did Black Mountain kick off fracking at the Half Moon well, perforating the 3rd Bone Spring interval – a geological formation acting as a hydrocarbon reservoir underground.
Management said the funds from the sale will be used to advance Black Mountain’s domestic onshore Western Australian gas project in the Canning Basin, called Valhalla.
“Funds will be used to progress the company’s flagship project in the Canning Basin, which has the potential to be an incredibly large resource. Progressing project Valhalla as swiftly as possible is our focus,” BME Executive Chair Rhett Bennett said.
“A return on investment of 100 per cent in less than 8 months is both a tremendously quick and strong outcome for the company.”
The sale remains subject to conditions including a 30-day due diligence period the responsibility of Tap Rock and the final sale price subject to any movement in acreage and or revenue received during the diligence window.
Tap Rock is liable to pay a 10 per cent break fee should any agreement terms be breached.
Black Mountain shares were up 38.1 per cent, trading at 2.9 cents at 11:31 am AEST.
