At the end of last month, Mosaic - as operator of PPL 119 - announced the discovery of 38 degree API oil at Downlands-3 in the interval 1630-1641 metres.

Following the discovery, Mosaic said the potential recoverable oil from five metres of net pay in the Downlands area could be in the region of two million barrels down to a sub-sea depth of 1640 metres.

"Since oil is also present at 1675 metres in a different prospect several kilometres away, the possibility of oil in the Tinowon sandstone around Downlands below 1641 metres sub-sea is high," the company said. "Hence there is considerable potential for this resource to be in excess of 2 million barrels of recoverable oil."

Mosaic said testing indicated that the Downlands field will be developed by pumping to surface tanks. With that in mind, the board of Mosaic estimated that the company's share of this resource could be worth in excess of $40 million to the company.

"Consequently, combined with the Churchie gasfield, the per share fully diluted value of the company's present reserves and other assets, is in excess of 50 cents per share," Mosaic said.