Petro Matad reports unexpected results from Gazelle-1 well

(Sharecast News) - Mongolia-focussed oil explorer Petro Matad announced the results of drilling and logging operations at the Gazelle-1 well in the north of Block XX, eastern Mongolia on Thursday, reporting that the well had been drilled with the DQE rig 40105 to a total depth of 2550 metres, with wireline logging completed.
The AIM-traded firm said the Lower Tsagaantsav reservoir objective was encountered at 2280 metres - 20 metres deeper than the pre-drill prognosis.

It explained that the interval penetrated was shale-dominated, with no hydrocarbon pay identified on the logs.

In the Upper Tsagaantsav reservoir objective, good wet gas shows were recorded throughout a predominantly shale prone section.

Three metres of net oil pay in good quality sandstone was defined on the logs.

Casing was now being run on Gazelle-1, with the well to be suspended pending further evaluation.

The company said its pre-drill interpretation of the area highlighted the possibility for a "pinch-out" of the Lower and Upper Tsagaantsav sands, which could set up "potentially material" stratigraphic traps in the southern extension of the Tamsag Basin.

It said the Gazelle-1 information would help better define those traps and their potential size within Block XX.

Looking at its other operations, Petro Matad also told investors that in light of the additional and ongoing expenditure on well testing at Heron-1, it was postponing its plans to return to drill in Block V during 2019.

The Velociraptor prospect in the Taats Basin, along with a newly-developed set of prospects in the neighbouring Tugrug Basin which, like the Taats, had "good evidence" of a working petroleum system, were considered to be attractive candidates for drilling, and would be the subject of further operational updates.

"The results in the Lower Tsagaantsav formation at Gazelle-1 were unexpected in light of the data from other wells in the area," said chief executive officer Mike Buck.

"However, the absence of sands in the Lower Tsagaantsav and the presence of a thin, but good quality pay zone in the Upper Tsagaantsav reservoir support the case for potentially significantly sized stratigraphic traps at the southern end of the Tamsag Basin within Block XX.

"This will be a focus of the post-well evaluation which will commence shortly, once the testing operations on Heron-1 are complete."