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- Black Mountain Energy (ASX:BME) sold its Half Moon prospect earlier this year in the US Permian Basin
- The Permian Basin is prime-grade US oil and gas acreage well understood
- The same geological formation is responsible for the American shale boom
- The company now has A$10.4 million on hand as the payment settled over the weekend
- Shares last traded at 2.1 cents
Energy explorer and developer Black Mountain Energy (ASX:BME) has confirmed the settlement of an A$10.4 million payment inked earlier this year.
The funds follow the company’s sale of its Half Moon prospect in the Permian Basin back in August.
The company had begun fracking the target only a month earlier in July. Half Moon is located in New Mexico, next door to Texas.
The region straddles the American coast, constituting the Gulf of Mexico, the continent’s prime offshore energy drilling hotspot.
At the time it began fracking Half Moon, the company expected its appraisal well to become producing by September. It was sold off before that month even started.
Of the funds paid to Black Mountain, the company received US$5.4 million for its landholding.
The actual “Manzano MIA 64 FEE 2H” well netted US$1.44 million.
“This sale of the Half Moon acreage satisfies every element of our exciting short-term gains strategy striking the right balance between an immediate cash boom and the future development opportunity that exists in Western Australia,” Black Mountain Executive Chair Rhett Bennett said.
“A return on investment of 100 per cent in less than eight months, at the time of the agreement, is both a tremendously quick and strong outcome for the company.”
All in all, the company sold off its asset to fund its main goal: the development of oil and gas assets onshore Western Australia.
Black Mountain’s key WA play is a project called Valhalla, located in the Fitzroy Trough in the Canning Basin. The company has previously referred to that basin as the “eighth largest undeveloped gas reservoir in the world.”
It also maintains that the Canning Basin is the last non-developed basin on the continent.
Its acreage was previously held by Buru Energy in tandem with none other than Mitsubishi.
BME shares last traded at 2.1 cents.
