With the granting of an exploitation licence in Mongolia and a swift fundraise, oil explorer Petro Matad (LSE:MATD) is now funded for its drilling programme which should see production start next year.
Chief Executive Mike Buck tells London South East's Sarah Lowther, he's hoping to get the Heron One discovery on stream by the middle of 2022. In parallel with that ambition Petro wants to drill two other wells within the proven area of the field so that by the end of the drilling campaign in 2022, "We’ve got three wells on production and finally producing some oil and some revenue."
"We're moving from the pure explorer that we’ve been throughout our existence into a production company as well as an explorer to continue our efforts in Mongolia to find more oil."
Those efforts will be expedited by the relationship that has been formed with neighbouring operator PetroChina who Buck says are "keen and very willing" to cooperate and offer access to their facilities. Commercial cost-effective negotiations are now underway with the Chinese oil and gas company about the processing and exporting of Petro Matad's oil.
In the meantime the Mongolian government is building a refinery in the country which will compliment the ambitions of Petro Matad's founding shareholder Petrovis which is also Mongolia's largest fuel distribution company.
Buck is grateful for Petrovis's invaluable support in his company's journey as it arrives at the inflexion point of development into production. He's also thankful for the support from retail investors who participated in the open offer, and who he hopes will benefit from the value creation generated in this next phase of the operation particularly as there's so much exploration potential in the licence area.