Mike Buck, CEO at Petro Matad (MATD), the AIM-listed Mongolian oil explorer and developer was interviewed by Donald Leggatt at London SouthEast/focusIrR.
Mike gave us a detailed operational update on progress in Mongolia.
1. The special purpose land certification for Block XX
• "This had to be approved at Cabinet level and took a long time coming, so we appreciate everyone’s patience on this. What’s happening now is the formal process to register that land with the land agencies; there are land management agreements which need to be signed and there are some herders with registered pasture who either need new land or to be offered compensation for the 214 sq km of land that will be within our areas."
2. So what are the next steps to take Heron-1 into production, and what milestones should we be looking out for in the coming months?
• “The provincial and district Governments now get involved and have to enact the cabinet decision to complete the legal process. The land agency most involved is working well and has sent out the documents which need to be sent out. The speed of response from them will determine what kind of timeframe there will be for Heron-1. The Ministry of Mining and the regulator MRPAM have said they would like us onstream by the end of this year, and will facilitate that and we would obviously like that too.”
• “We also need an oil sales agreement with PetroChina sorted out. We have an MOU signed a long time ago covering the export and sale of oil and MRPAM is helping us with that. We are looking to piggy-back on their very effective export route.”
3. It’s been a long time coming – so perhaps it’s worth reminding us what the economics of the project look like?
• “Heron-1 has been drilled and just needs us to complete it, a short piece of work. All the equipment is in-country and ready. The contractors have confirmed their availability. In terms of economics we are looking at 60 million+ barrels of oil recoverable. Not all are proven of course, but we will as much and as quickly as we can’. in central Mongolia.”
4. That said, you had a disappointing result from the Velociraptor 1 exploration prospect in central Mongolia? So what next for the Raptor trend – do the economics merit further exploration wells?
• “Right now I’m doubtful that we can find a sufficiently clear explanation for the failure of the well that is actually specific to Velociraptor and that would probably not justify drilling again on the Raptor trend.”
5. And what’s the latest news on Phase One and Two of the Exploitation Licensing round that covers the south of Mongolia?
• “4 tranches, 17 blocks offered, PTMD has applied for two blocks and is evaluating another more recent one. These blocks share boundaries with proven producing basins on the Chinese side of the border. We have submitted terms on the first block, nobody else has applied for the second.”
6. And what about your renewables joint venture with SunSteppe Energy?
• “I’m pleased with the JV so far. It is a joint venture with a local developer called Sunsteppe that has a good track record of being able to bring projects to construction ready. Mongolia has massive potential for solar and wind generated power.”
7. And, final question, what kind of newsflow can we expect in the next few months – what are the key areas of focus for Petro Matad?
• “We really want Heron-1 onstream as a priority – as well as all the other exciting stuff. That’s the big target for 2023 – we really want to get that onstream, and we will announce it when we do.”
Petro Matad (MATD)