Half-year Results

Mosman Oil and Gas Limited (AIM: MSMN) the hydrocarbon, helium and hydrogen exploration, development and production company, announces its Half Year results to 31 December 2023 (H124).

Summary

• Revenue: $533,794 (H123 $ 936,187) mainly impacted by notably lower production at Stanley and Cinnabar where work continues to resolve production challenges.
• Gross Profit: $34,059 (H123 $ 283,003)
• Net loss: $ 984,851 (H123 $665,096)
• Net Production to Mosman of 6,289BOE

All amounts are in Australian Dollars

1BOE/boe - barrels of oil equivalent

2Gross Project Production - the production of BOE at a total project level (100% basis) before royalties (where Mosman is the Operator) and where Mosman is not the operator the total gross production for the project

3Net Production - Net to Mosman's Working interest before royalties

Operational overview

USA

• Development project continues at Cinnabar where technical work has identified opportunities for increasing production. Workovers undertaken had limited success. Technical work has identified a zone to be recompleted before the next step of installing artificial lift. Technical work is being conducted on the new lease area acquired that appears highly prospective based on 3D seismic.
• Stanley continues to be the main centre of production. Production was affected by downtime due to reconfiguration of production equipment and weather conditions in December .

Australia

• EP 145 Farmout Agreement was signed with a subsidiary of Greenvale Energy Ltd (ASX:GRV) in October to fund seismic and drilling. GRV can earn 75% interest by funding seismic acquisition and drilling a well (to a cap of $5.5m). This agreement remains subject to completion pending ministerial approval.
• EP(A) 155 is subject to a conditional farmout agreement and continues the process of seeking native title approval required for the grant of the licence.

Board update

• John Young stepped down from the Board in September 2023.
• Andy Carroll, Technical Director appointed CEO in September, with Nigel Harvey appointed as Non-Executive Chairman and Carl Dumbrell appointed to the Board as Non-Executive Director. John Barr stepped down in October 20223.

Andy Carroll, CEO of Mosman commented:

"The Board has been refreshed and the company has been re-organised with a lower cost base. In the US, we continue cost effective production optimisation to commercialise these assets and exploration work continues in Australia on the areas prospective for helium, hydrogen and hydrocarbons."

Operations Review

The conclusion of the Strategic Review was to commercialise the production assets (which may include sale of some assets) and not to proceed with IPO of the Australian assets as there was limited investor interest in IPOs in 2023. As part of this process, the Group incurred some costs in establishing a holding company for the Australian assets in regard to evaluating the potential for an IPO of that company.

The Board renewal process was completed with the appointment of Carl Dumbrell. Carl is a qualified accountant and brings extensive experience in Australian and AIM companies. John W Barr and John Young stepped down and are thanked for their service in the successful IPO and steering the company through exploration and building a production base in the USA. The corporate re-organisation resulted in a reduction in the number of Directors from four to three; the reduction in executive directors from two to one; and a clearer separation of Board and management with two independent Directors and a Chief Executive Officer, and the redundancy of the one employee. Whilst there are now lower fixed overheads, there were some one-off costs associated with this reorganisation.

Turning to development of the producing US projects, more than $475k was invested in increasing production and progressing exploration during the period. Stanley continues to be the main centre of production and the production equipment has been reconfigured with jet pumps.

The development project, Cinnabar, was which was acquired at modest cost when oil and gas prices were lower in 2021, has had an extensive technical work, including reprocessing and re-interpretation of 3D seismic. Whilst results of the Cinnabar development well drilled in November 2022 confirmed the presence of oil and led to an upgrade of Reserves, the production rates have been disappointing. Technical work has identified opportunities for increasing production, and several workovers have now been undertaken on the three wells on the lease. Work will continue to increase production, and to de-risk a new lease area acquired that appears highly prospective based on 3D seismic.

Gross Reserves (MBOE):

In Australia's Northern Territory, Mosman holds a 100% interest over the EP-145 permit and continues to work to secure all required approvals for the next step of exploration.

A Farmout Agreement was signed with a subsidiary of Greenvale Energy (ASX:GRV) in October 2023, whereby GRV can earn 75% interest by funding seismic acquisition and drilling a well (to a cap of AUD 5.5 million). This currently remains subject to completion pending ministerial approval.

A Prospective Resource estimate for EP-145 was published by Mosman in October 2022 and is detailed below.

As shareholders and stakeholders expect, Mosman continues to take its Health and Safety requirements very seriously and to date there have been no health, safety or wellbeing issues reported in our small team.

Results

The unaudited results for the six months to 31 December 2023 reflect a 43% decrease in sales to $533,794 ($936,187 in 2022). Gross profit also decreased by 88% to $34,059 ($283,003 in 2022). The lower sales and gross profit margins were primarily due to lower production at Cinnabar and Stanley as recompletions and upgrade works were undertaken, as well as lower oil and gas prices in the period.

The overall result for the period was a net loss of $984,851 (2022: $665,096). This includes one-off restructuring costs of over $100k that are intended to reduce ongoing costs.

Projects

Mosman has Working Interests in eight onshore producing projects located in the USA, in addition to one granted exploration permit and one application for an exploration permit in the Amadeus Basin in Central Australia.

Producing Projects in the USA

A summary of the current oil and gas projects as at 27 March 2024:

US PROJECTS

• Mosman's ownership is working interest before royalties. The interest shown is approximate, as there are small variations on individual wells

Production Summary for the six months ending 31 December 2023

1BOE/boe - barrels of oil equivalent

2Gross Project Production - Means the production of BOE at a total project level (100% basis) before royalties (where Mosman is the Operator) and where Mosman is not the operator the total gross production for the project

3Net Production - Net to Mosman's Working Interest; Net Production attributable to Mosman means net to Mosman's Working Interest before royalties

Australia

AUSTRALIAN EXPLORATION PROJECTS

• Mosman's ownership is working interest before royalties and the interest shown is subject to farmin agreements (detailed below)

Mosman has continued to conduct technical work on its Central Australian exploration projects, focused on the 100% owned EP-145, in the Amadeus Basin, Northern Territory.

The Prospective Resource estimate for EP-145 published by Mosman in October 2022 and is detailed below.

All seismic and drilling activities are subject to obtaining the necessary planning approvals from the NT Department of Industry and Resources.

On 16 October 2023, the Company announced that it had entered into a farmout agreement with Greenvale Gold Pty Ltd, a wholly owned subsidiary of Greenvale Energy Ltd (ASX:GRV) to fund seismic and drilling on its EP 145 project in the Northern Territory of Australia. Upon Completion, Mosman would retain a 25% working interest in EP 145 and Greenvale would earn a 75% working interest in EP 145 by:

• Committing to pay AUD160,000 in cash within 5 days of Completion, which is subject to government approval of the transfer of interest and Operatorship.
• Paying for the EP 145 Permit Year 3 Work Program, including seismic, effective from Completion Date.
• Funding the Permit Year 4 Work Program, including drilling one well with a well cost cap of AUD5.5 million.
• The Year 3 Work Program is to be completed by August 2024 and the cost of the seismic acquisition is estimated to be circa AUD2 million.
• The Year 4 Work Program is to be completed by August 2025. The cost of drilling a well depends on many factors including the depth of a well and cost of drilling rigs at the time of drilling.

At Mosman's other central Australian project in EPA-155, the permit application is subject to Native Title negotiations. The required site visit was delayed by the Covid-19 pandemic. Mosman has a farmout agreement, and the farm-in partner has advised they are discussing with the Central Land Council ("CLC") and have arranged a site visit.

Matters subsequent to the reporting period

• On 15 January 2024, the Group announced it had lodged the Environmental Management Plan ("EMP") with the Northern Territory Government. Approval of the EMP and re-issue of the Aboriginal Areas Protection Authority ('AAPA') Certificate are the two remaining approvals required prior to the acquisition of 2D seismic, scheduled for 2024.
• On 23 January 2024, the Group announced that Mosman and Greenvale Gas Ltd ("GRV"), a subsidiary of Greenvale Pty Ltd (ASX:GRV), had agreed to amend the Farmin Agreement so that the right for either party to terminate the agreement is changed from 31 January to 30 March 2024.
• On 2 February, the Group announced it had raised £300,000 (before expenses) by way of a placing of 2,400,000,000 ordinary shares at a price of 0.0125 pence per share.
• On 7 February, the Group held and Extraordinary General Meeting, where shareholder approval was received to issue 84,210,526 shares and 42,105,263 warrants to CEO Andrew Carroll, and 42,105,263 shares and 21,052,632 warrants to Chairman Nigel Harvey. Shares were issued for cash consideration at 0.0125p per share. The warrants are exercisable at 0.025p each with a two year expiry. All shares and warrants were issued on the same terms as the placement announced on 29 November 2023.

There were no other material matters that occurred subsequent to 31 December 2023.

Glossary:

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For The Half Year Ended 31 December 2023

The accompanying notes form part of these consolidated financial statements

All amounts are in Australian Dollars

Consolidated Statement of Financial Position

As at 31 December 2023

The accompanying notes form part of these consolidated financial statements

All amounts are in Australian Dollars

Consolidated Statement of Changes in Equity

For the Half Year Ended 31 December 2023

Transactions with owners, in their capacity as owners, and other transfers:

Transactions with owners, in their capacity as owners, and other transfers:

The accompanying notes form part of these consolidated financial statements

All amounts are in Australian Dollars

Consolidated Statement of Cash Flows

For the Half Year Ended 31 December 2023

The accompanying notes form part of these consolidated financial statements

All amounts are in Australian Dollars

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2023

All amounts are Australian Dollars

Summary of Significant Accounting Policies

Statement of Compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS34 Interim Financial Reporting. The half-year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Group's 2023 annual financial report for the financial year ended 30 June 2023, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards (IFRS).

Going Concern

The condensed consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the discharge of liabilities in the normal course of business.

The directors have considered the funding and operational status of the business in arriving at their assessment of going concern and believe that the going concern basis of preparation is appropriate, based upon the following:

• The ability to further vary cash flow depending upon the achievement of certain milestones within the business plan and;
• The ability of the Company to obtain funding through various sources, including debt and equity.

However, should the Group be unable to raise further required financing from equity markets or other sources, there is uncertainty which may cast doubt as to whether or not the Group will be able to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

Exploration and Evaluation Costs

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area for which the rights to tenure are current and that has not at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing.

Impairment of Exploration and Evaluation Assets

Impairment tests are carried out when there are indicators of impairment in order to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts. If, after having capitalised the expenditure under the policy, a judgement is made that the recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to profit and loss.

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2023

All amounts are Australian Dollars

Summary of Significant Accounting Policies (Continued)

The key areas of judgement and estimation include:

• Recent exploration and evaluation results and resource estimates;
• Environmental issues that may impact on the underlying tenements; and

Revenue and Other Income

Revenue from joint operations is recognised based on the Group's share of the sale by the joint operation.

Oil and Gas assets

When an oil and gas asset commences production, costs carried forward are amortised over the expected life of the economically recoverable reserves. Changes in factors such as estimates of economically recoverable reserves that affect amortisation calculations do not give rise to prior financial period adjustments and are dealt with on a prospective basis.

Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance.

New standards and interpretations

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Standards Board ('AASB') that are mandatory for the current reporting period.

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2023

All amounts are Australian Dollars

• When appropriate, unpaid joint interest billing receivables are recovered from the interest holders share of production income.

5 Other Assets

The Board has carried out an impairment assessment of the Oil and Gas Assets and have concluded that no impairment is required.

On 16 October 2023, the Company announced that it had entered into a farmout agreement with Greenvale Gold Pty Ltd, a wholly owned subsidiary of Greenvale Energy Ltd (ASX:GRV) to fund seismic and drilling on its EP 145 project in the Northern Territory of Australia. Upon Completion, Mosman would retain a 25% working interest in EP 145 and Greenvale would earn a 75% working interest in EP 145 by:

• Committing to pay AUD160,000 in cash within 5 days of Completion, which is subject to government approval of the transfer of interest and Operatorship.
• Paying for the EP 145 Permit Year 3 Work Program, including seismic, effective from Completion Date.
• Funding the Permit Year 4 Work Program, including drilling one well with a well cost cap of AUD5.5 million.
• The Year 3 Work Program is to be completed by August 2024 and the cost of the seismic acquisition is estimated to be circa AUD2 million.

The Year 4 Work Program is to be completed by August 2025. The cost of drilling a well depends on many factors including the depth of a well and cost of drilling rigs at the time of drilling.

On 23 January 2024, it was agreed to amend the Farmin Agreement so that the right for either party to terminate the agreement is changed from 31 January to 30 March 2024.

120,000,000 warrants were issued to brokers as part of their fee for facilitating a placement of shares in the period. The warrants are valued using the Binomial Method with the following inputs:

11 Segment Information

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board to make decisions about resources to be allocated to the segments and assess their performance. Operating segments are identified by the board based on the Oil and Gas projects in Australia the United States. Discrete financial information about each project is reported to the board on a regular basis. The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate. The Group has two reportable segments based on the geographical areas of the mineral resource and exploration activities in Australia, the United States. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

Segment performance

Reconciliation of segment result to net loss before tax

Amounts not included in segment result but reviewed by the Board

Reconciliation of segment result to net loss before tax

Amounts not included in segment result but reviewed by the Board

12 Producing assets The Group currently has 5 producing assets, which the Board monitors as separate items to the geographical and operating segments. Project performance is monitored by the line items below.

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2023

All amounts are Australian Dollars

13 Expenditure Commitments (a) Exploration The Company has certain obligations to perform minimum exploration work on Oil and Gas tenements held. These obligations may vary over time, depending on the Company's exploration programs and priorities. At 31 December 2023, total exploration expenditure commitments for the next 12 months are as follows:

• EP145 is currently under extension until 21 August 2024, therefore there are no committed expenditures as of the date of this report.
• Capital Commitments The Company had no capital commitments at 31 December 2023 (2022 - $Nil).

14 Warrants A summary of the movements of all company warrant issues to 31 December 2023 is as follows: Company Warrants 31 December 2023 Number of Options 30 June 2023 Number of Options Outstanding at the beginning of the period 1,288,928,571 1,584,250,000 Expired - (896,750,000) Granted 1,548,571,428 601,428,571 Outstanding at the end of the period 2,837,499,999 1,288,928,571 Exercisable at the end of the period 2,837,499,999 1,288,928,571

15 Subsequent Events Subsequent to the end of the reporting period the Company announced the following material matters occurred: · On 15 January 2024, the Group announced it had lodged the Environmental Management Plan ("EMP") with the Northern Territory Government. Approval of the EMP and re-issue of the Aboriginal Areas Protection Authority ('AAPA') Certificate are the two remaining approvals required prior to the acquisition of 2D seismic, scheduled for 2024. · On 23 January 2024, the Group announced that Mosman and Greenvale Gas Ltd ("GRV"), a subsidiary of Greenvale Pty Ltd (ASX:GRV), had agreed to amend the Farmin Agreement so that the right for either party to terminate the agreement is changed from 31 January to 30 March 2024. · On 2 February, the Group announced it had raised £300,000 (before expenses) by way of a placing of 2,400,000,000 ordinary shares at a price of 0.0125 pence per share. · On 7 February, the Group held and Extraordinary General Meeting, where shareholder approval was received to issue 84,210,526 shares and 42,105,263 warrants to CEO Andrew Carroll, and 42,105,263 shares and 21,052,632 warrants to Chairman Nigel Harvey. Shares were issued for cash consideration at 0.0125p per share. The warrants are exercisable at 0.025p each with a two year expiry. All shares and warrants were issued on the same terms as the placement announced on 29 November 2023. There were no other material matters that occurred subsequent to 31 December 2023.

16 Dividends No dividends have been paid or proposed during the half year ended 31 December 2023.