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(Alliance News) - Petro Matad Ltd on Tuesday said that while it was pleased to see progress towards certifying one of its licences in Mongolia, the process was still proving much slower than initially advised.
Petro Matad is the Isle of Man-based, Mongolia-focused parent company of a group focussed on oil exploration. It owns and operates two production sharing contracts with the Mongolian government: Block XX, located in the far eastern part of the country; and Block V in the central-west.
For the past year, the company has struggled to certify its flagship licence in the east, due to local opposition. Most recently, meetings held on a provincial level in the Matad district saw citizens committees vote against the central government's certification proposal.
In December, Petro Matad said that the Mineral Resources & Petroleum Authority of Mongolia had written to the Ministry of Mining & Heavy Industry in spite of local views, recommending certification of the Block XX Exploitation Licence. It added that delays meant it would not likely be able to operate on the Heron development until the spring of 2023, once its land access rights have been re-established.
On Tuesday, Petro Matad told investors that progress towards certifying the licence as special purpose land has progressed, although slower than initially advised. The company said that it has continued to press "for rapid action at all levels", and this remains its "number one priority".
Formal correspondence from central, provincial and district authorities has been sent to the relevant agencies as required by the legally prescribed process ahead of submission of the certification to cabinet for approval, the company noted.
Contracts with the in-country well testing and completion contractors are in place for the completion work required on Heron 1.
In further news, the company is now preparing to drill the Velociraptor 1 well following a recent equity raise. It said the well would have a "transformational impact" for Mongolia, as well as for the company in the event of success.
"Whilst we are pleased to see the process for special purpose certification of Block XX moving forward, we are disappointed with the pace and have made this abundantly clear to the authorities. Our recent interactions with the local authorities have given us renewed hope that we may be able to secure local land use approvals and we are pursuing these in parallel with the certification process," said Chief Executive Officer Mike Buck.
"We are very excited about the prospectivity in Block V and are looking forward to drilling Velociraptor 1 during the second quarter. This low cost well is targeting big resource potential and will have a huge financial impact for Petro Matad if it comes in."
Petro Matad shares were trading 7.9% lower at 2.88 pence each in London on Tuesday morning.
By Holly Beveridge; Alliance News reporter
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