Petro Matad Share News (MATD)

(Alliance News) - Mongolian oil explorer Petro Matad Ltd said Monday it is progressing with the exploitation licence application for Block XX, as the Mongolian government advises that there is high level support for the licence grant.

Petro Matad has already submitted detailed appraisal and reserves reports, which are currently being reviewed by the Ministry of Mining & Heavy Industry. Once they are approved, the company will then be required to submit a plan of development and environmental impact assessment, which Petro Matad said is "well advanced".

As part of preparing the reserves report, Petro Matad commissioned Leap Energy to prepare a competent persons report for the northern part of Block XX, where the Heron and Gazelle discoveries are located.

The CPR concluded that the Heron discovery has mean, unrisked in-place oil resource potential of 194 million barrels, 20% higher than Petro Matad's initial internal assessment.

Within its portfolio, Petro Matad said it plans to relinquish Block IV, due to the short time left on the production and sharing contract without any high-graded drillable targets.

Meanwhile, the company has proposed to the Mongolian government for a moratorium on the PSC for Block V to give more time for the securing of funding and partners for the next phase of exploration.

This is for the drilling of prospects in the block where active petroleum systems have been discovered.

Looking towards the Covid-19 outbreak, Petro Matad noted that the Mongolian government has banned public gatherings until the end of April, and its land border with China has been closed to everything but cargo.

Should measures such as these be prolonged, the company said they will impact the Mongolian oil sector, which relies a lot on Chinese equipment and workers in production and development operations.

"Our staff and contractors are working exceptionally hard in the highly unusual circumstances that the ongoing coronavirus pandemic has generated and the company is very appreciative of their commitment and diligence. We are monitoring the situation closely and are pleased to advise that there has been no significant impact on Petro Matad's operations, whilst we focus our efforts towards securing approvals and permits for the company's near-term work programme," said CEO Mike Buck.

Shares in Petro Matad remained flat at 2.1 pence on Thursday in London.

By Dayo Laniyan; dayolaniyan@alliancenews.com

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