Mosman Oil & Gas says New Zealand tests fail to find big oil

Mosman Oil & Gas reported downbeat news from one of its projects but insisted that it still believed its bid to merge with Australian oil and gas explorer MEO Australia would succeed despite a rival bid.

New South Wales-based Mosman said tests on wells at its Petroleum Creek project in New Zealand had not produced commercial quantities of oil.

The group added on Thursday that Neon Energy, which has made a rival bid to merge with MEO, had received an approach from another company, Evoworld, that could be better than the MEO plan.

Mosman said it continued to believe the proposed merger between MEO and Neon would fail and remained confident that its offer will eventually be accepted, as it guarantees real organic growth for both firms.

Mosman offered MEO shareholders the equivalent of one fully paid share in the former for every 20 shares held in the latter. The bid values Mosman at around 20 times the value of MEO.

As of 12:31 on Thursday, the group’s share price dropped 31.82% to 11.25p per share.