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(Sharecast News) - Mongolian oil explorer Petro Matad reported progress on a number of fronts in an operational update on Tuesday.
The AIM-traded company reported progress towards registering its Block XX Exploitation Area as special purpose land, although that was happening slower than anticipated.
It said it was also preparing for high-impact exploration drilling on the Velociraptor prospect in the second quarter.
The drilling programme was expected to be pivotal for the company, as it explored the potential of Velociraptor to boost its oil reserves.
In addition, the company said it had submitted an application for a new block in Mongolia's 2023 Exploration Tender Round.
Petro Matad said it was also planning to pursue more blocks throughout the year as part of its ongoing exploration efforts.
The firm also noted the recent establishment of a joint venture with a "successful" renewable energy project developer.
It said the aim of the joint venture was to explore opportunities in Mongolia's high-potential renewables sector.
The company said it believed the joint venture would allow it to capitalise on growing demand for renewable energy in the region, while also helping to diversify its business interests.
Finally, Petro Matad said it successfully closed an equity capital fundraise round totalling $6.6m.
The funds would be used to finance its ongoing exploration efforts, including the upcoming drilling programme on the Velociraptor prospect.
"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," said chief executive officer Mike Buck.
"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.
"We are very excited about the prospectivity in Block V and are looking forward to drilling Velociraptor 1 during the second quarter."
Buck said the "low-cost" well was targeting "big resource potential", and would have a "huge" financial impact for Petro Matad if it came in.
"We are also enthusiastic to get involved in the renewable energy sector in Mongolia through the SunSteppe Renewable Energy joint venture.
"Our Mongolian partners in this endeavour bring a wealth of experience and we have high hopes that it will generate attractive opportunities in the near term.
"Our recent equity raise has given the company the financial firepower it needs to maintain the company's operational capability, to execute a high impact exploration programme, to start production from our existing discovery once permits are secured, to pursue new acreage and to expand activities into renewables."
At 1417 GMT, shares in Petro Matad were down 4.66% at 2.98p.
Reporting by Josh White for Sharecast.com.