Snow Leopard 1 Well Results

RNS Number : 3215B

Petro Matad Limited

20 September 2018

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY PETRO MATAD LIMITED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

20 September 2018

Petro Matad Limited

("Petro Matad" or the "Company")

Snow Leopard 1 Well Results

Petro Matad, the AIM quoted Mongolian oil explorer, provides a summary of the results from its Snow Leopard 1 well:

The Snow Leopard-1 well, drilled in Petro Matad's 100% owned and operated Block V, and the first oil exploration well ever drilled in the 60,000km² Valley of the Lakes basin complex of central Mongolia, has reached total depth of 2930m MD in granitic basement.

No sands were encountered at the shallower of the two primary targets of the well although drilling gases (C₁ to C₅) and an oil sheen in the drilling mud were observed across the interval. The gases are believed to be indicative of an active petroleum system in the basin and the oil observed in the mud is suspected to have entered the well from one of the prospect bounding faults which may be acting as a conduit for migrating oil.

The deeper objective of the well was encountered on the pre-drill depth prognosis with good development of sandstones in an overall gross interval of more than 400m. However, no oil or gas shows were observed while drilling through these sediments and subsequent logging confirmed them to be water bearing. The absence of hydrocarbon shows is being investigated. The primary pre-drill risk for this target was effectiveness of the fault bounded trap. Given the evidence of an active petroleum system in the basin, with confirmed source and reservoir outcrops on the basin flanks and well-developed source and reservoir intervals in the well, the lack of shows at this level appears to be prospect specific, with the bounding fault either not sealing or having been breached.

The Snow Leopard-1 well will now be plugged and abandoned and the post well evaluation will commence. Initial examination of cuttings samples and wireline logs indicates the presence of a significant thickness of source rocks in the well, including claystone layers with a 'hot shale' wireline log response. The hot shale response can be an indicator of very high organic content (and hence very good source potential) and this will be investigated as the presence of thick, rich source rocks will have a positive impact on de-risking the surrounding prospects in the Taats basin and the adjacent basins.

Once operations are complete at Snow Leopard, the rig will move to the Wild Horse 1 location, a mobilisation distance of some 450km. The Wild Horse prospect, targeting 480 MMbo of prospective resource, is a large four-way dip and fault bounded closure in the Baatsagaan Basin in Petro Matad's Block IV. The Company has completed all pre-drill formalities for Wild Horse 1, has all the required approvals in hand and has engaged proactively with local stakeholders. A further update will be provided when the well spuds.

Mike Buck, the CEO of Petro Matad said:

"Whilst Snow Leopard 1 did not find the oil accumulations we had hoped for there are encouraging signs in terms of confirmation of source and reservoir rock development. The presence of oil and wet gas shows has heightened our interest in the other prospects mapped in the Taats basin. We are working these up now based on the wealth of information gathered in the well.

Operational attention now shifts to the high impact Wild Horse well which offers huge prospective resource potential and significant follow up in prospects and leads mapped in the Baatsagaan basin."

For more information, please contact:

Petro Matad Limited
Mike Buck, CEO	[phone] / [phone]
Stockdale Securities Limited (Nominated Adviser and Broker)
Richard Johnson Andy Crossley David Coaten	[phone]
Stifel Nicolaus Europe Limited (Broker)
Callum Stewart Nicholas Rhodes Ashton Clanfield	[phone]
FTI Consulting (Communications Advisory Firm)
Sara Powell Ben Brewerton	[phone]

All Reserves and Resources definitions and estimates shown in this report are based on the 2007 SPE/AAPG/WPC/SPEE Petroleum Resource Management System ("PRMS").

Technical information in this news release has been reviewed by the Company's Exploration Manager, Mr. Jerry Smart. He has 36 years of industry experience in oil and gas exploration and production with LASMO, Eni, Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's College, London.

Glossary

MMbo	million barrels of oil
Prospective Resources	estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled
MD Drilling gases (C1 to C5)	measured depth hydrocarbon gases entering the drilling mud whilst drilling are continuously monitored and analysed. In the Snow Leopard 1 well, hydrocarbon gases from Methane (C1) up to Pentane (C5) were detected.

About Petro Matad

Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds the sole operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,340 square kilometres in the far eastern part of the country, and Blocks IV and V have an area of 28,900 square kilometres and 21,100 square kilometres, respectively, in the southwest part of the country.

Petro Matad Limited is incorporated in the Isle of Man under company number 1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle of Man, IM1 1EQ.

 

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