(Alliance News) - Petro Matad Ltd on Wednesday said it has successfully spudded a well in the Taats Basin of Block V, located in central Mongolia.
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.
The Velociraptor-1 exploration well, which was spudded on Tuesday, is part of Block V.
It is targeting an inversion anticline prospect estimated to have 200 million barrels mean prospective recoverable resource potential.
Drilling is planned to a total depth of 1,500 metres, and should take just under a month to complete.
Encouraging results from drilling would "significantly" de-risk two adjacent prospects on the Raptor Trend, Petro Matad added.
The firm also gave investors an update on Block XX.
The Mongolian Ministry of Construction & Urban Development has now completed its internal work on certifying the exploitation area as special purpose land, and has submitted the documentation to all other government ministries for comment prior to submission to cabinet.
Petro Matad said it has continued to press the relevant authorities to conclude this process.
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 this year, once its land access rights had been re-established.
Petro Matad shares were trading 10 lower at 4.26 pence each in London on Wednesday morning.
By Holly Beveridge, Alliance News reporter
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Petro Matad (MATD)