Operational update

RNS Number : 4041D

Petro Matad Limited

26 June 2019

 

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.

26 June 2019

Petro Matad Limited

Operational Update

Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil explorer, provides an operational update on progress towards its planned drilling programme in 2019, and its application for PSC extensions for Blocks IV and V.

Operational Highlights

·    Drill sites for the three Block XX wells, Heron 1, Red Deer 1 and Gazelle 1, have been completed and water supply wells are ready

·    Rig mobilization notices have been issued to both drilling contractors and customs clearance for their equipment and supplies has been obtained

·    The Company is on track to spud the Heron 1 during July 2019, using DQE's rig 40105. The Gazelle 1 well will follow immediately after Heron 1 operations, allowing for a short rig move

·    Red Deer 1 is expected to spud before the end of July 2019, using Daton's rig DXZ1

·    Applications for extensions to the Blocks IV and V Production Sharing Contracts (PSC), submitted in mid-April 2019 have received support from the working group at the Mineral Resources and Petroleum Authority of Mongolia (MRPAM)

·    The Velociraptor Prospect has been chosen as the next drilling target in Block V and permitting is progressing

Block XX Exploration Drilling Programme

The three well drilling campaign in Block XX will begin in the north with the Heron 1 well to be be drilled with DQE's rig 40105. Heron is an estimated 25 MMbo prospect (Mean Prospective Recoverable Resource) and the well is on target to spud during July 2019. The latest mapping shows that the well is an appraisal of the T19-46 oil field immediately to the north in Block XIX. Mapping is based on the interpretation of high-quality 3D seismic data covering southern Block XIX and northern Block XX recently provided to the Company by Petro China. Heron 1 will be drilled to a planned total depth (TD) of 3,050 metres and will take approximately 40 days to drill and log.

The Gazelle 1 well will follow Heron 1 after a six kilometre rig move and will take approximately 35 days to drill and log. The planned TD is 2,500 metres and the Gazelle Prospect has an estimated Mean Prospective Recoverable Resource of 13 MMbo. Gazelle 1 is located updip of Petro China's T19-46-1 oil well on the western flank of the Tamsag Basin which is the primary source kitchen for the fields in Block XIX.

The Red Deer 1 well in the south of Block XX is to be drilled by Daton's rig DXZ1, with spud targeted before the end of July 2019. The Red Deer 1 well will be drilled to a planned TD of 2,100 metres and is forecast to take 35 days to drill and log.  The Mean Prospective Recoverable Resource assessment for the Red Deer prospect is 48 MMbo.

Site construction for all three drilling locations has been completed and water supply wells are ready. Rig mobilization notices have been issued to the drilling contractors, customs clearance for the equipment and supplies being imported into Mongolia by both drilling contractors has been obtained and visa approvals have been secured for the Chinese rig crews, who are now mobilizing to Mongolia.

In accordance with PSC provisions, the Company has commenced discussions with MRPAM and the Ministry of Mining and Heavy Industry to secure an Exploitation License under the Block XX PSC for any discoveries made in the 2019 drilling campaign. Appraisal activities will be prioritised by the Company in the event of success.

Blocks IV and V

The Company is pleased to announce that its applications for two-year extensions, running until July 2021, for Blocks IV and V are supported by the working group within MRPAM. Formal notification of the extensions is expected shortly.

In the event that the Company needs to focus its efforts on the rapid appraisal of any discoveries made in Block XX in the 2019 drilling season, these extensions provide the flexibility and time to drill the Blocks IV and V prospects during the 2020 drilling season.

Technical work on Blocks IV and V has continued following the 2018 drilling campaign with a number of new prospects and leads identified. Following the Snow Leopard-1 well proving a working petroleum system in the Taats Basin, the Velociraptor Prospect has been chosen as the next target for drilling in Block V. Velociraptor is a large, shallow, inversion anticline in the Taats Basin with Mean Prospective Recoverable Resource potential of 201 MMbo. Work is progressing to secure the environmental permits for the drill site and for potential follow up locations along the Raptor trend.

Mike Buck, the CEO of Petro Matad said:

"We are looking forward to starting our 2019 drilling operations after considerable effort to secure all the necessary permits and to complete preparations. The real work starts now and the next few months will certainly be a very exciting time for the Company."

Further information please contact:

Petro Matad Limited
Mike Buck, CEO	[phone] / [phone]
Stockdale (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 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 37 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

Mean                                                    The arithmetic average of the low, mid and high case estimates of recoverable prospective resources

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

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 100% working interest and the operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,367 square kilometres in the far eastern part of the country, and Blocks IV and V have an area of 29,062 square kilometres and 21,143 square kilometres, respectively, in the central western 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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