Petro Matad Share News (MATD)

(Sharecast News) - Mongolian oil company Petro Matad updated the market on its operations on Thursday, highlighting the successful re-entry and completion of the Heron-1 oil discovery well, as well as plans for its upcoming 2024 drilling programme.

The AIM-traded firm said the Heron-1 well had been re-entered, stimulated, and completed for production without issues.

It said the reservoir was successfully stimulated, with oil observed during fluid recovery, adding that the down-hole pump had been installed, preparing the well for production.

The well site was now ready for the installation of surface production facilities, with spare oil storage tanks provided by PetroChina, which were currently undergoing integrity testing.

Petro Matad said it was also advancing discussions with PetroChina and the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) on the processing, transport, and sale of Block XX production, in line with a 2021 memorandum of understanding signed with PetroChina.

For its 2024 drilling programme, Petro Matad contracted DQE Drilling, PetroChina's drilling subsidiary, with mobilisation of the rig for the Heron-2 well expected by the end of August and spud anticipated by mid-September.

Heron-2 would be drilled to a depth of approximately 2,900 metres, with plans for evaluation, testing, and completion within the current operational window.

Additionally, a smaller rig would be mobilised in September for the Gobi Bear-1 exploration well, which would be drilled to a total depth of 1,800 metres.

The well was expected to spud before the end of September, with logging and potential testing scheduled before the operational shutdown in late November.

"With the Heron-1 down-hole completion now ready for production startup, the well site has been prepared for the installation of the surface production facilities," said chief executive officer Mike Buck.

"We are pleased to have concluded our negotiations with DQE and look forward to continuing to work with them on the 2024 drilling programme.

"The team is now working at pace to spud Heron-2 in mid-September and to secure the required construction permits for Heron-1."

At 1143 BST, shares in Petro Matad were up 4.6% at 2.96p.

Reporting by Josh White for Sharecast.com.