Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
After the last operational update, it was quite obvious that being granted the Local Permit is the definitive catalyst for both the company and the share price.
There are a few of us here who have been in for quite a few years but most investors on AIM are looking for a quick profit and then move on to the next target. That lack of patience has been the largest suppressor of the share price and hopefully after the LP is granted and the short term investors take their profits, this company may start attracting more of those willing to see the bigger picture and the benefits that will generate.
Fundamentally we have an asset in Heron that can potentially produce 60million barrels of oil currently worth circa $80 per barrel. That’s $4.8 billion and it’s ours. We are awaiting DQE’s HQ to sign off on a multi well programme to exploit Heron.
Velociraptor is a biggy. Yes, it’s an exploration drill but the board seem confident. Velociraptor, if successful, also installs more confidence that Fox and Phoenix will also be massive.
Then there is the renewable energy joint venture. Mongolia consume 7.7 terra watts of electricity annually. There is a customer base already waiting.
Current mcap nowhere near reflects our true value but the granting of the Local Permit should go a long way in helping us move towards a more realistic one.
Hope you all do really well from this and P.S. Thank you Master82 for providing fantastic updates regarding the current situation.
Well Doc83, I know I am not as well read on things as I used to be but a number of things caught my eye.
Negotiations with DQE have been completed and awaiting sign off for the multi well programme and not just the work over.
We are targeting specific block licences rather than applying for them all and hoping to land one or two.
A Canadian company is doing the drilling at Velociraptor.
Sunsteppe energy is just about good to go.
All positives from my point of view apart from the infuriating delay in local access at Heron.
It’s quite evident that local access is the catalyst to change sentiment here. Apart from the continued delay, that was a fantastic RNS and had it contained the permission we are all waiting for this would now be trading in double figures.
On the Block V Exploration PSC area, local government approvals for land access have been secured. This area does not have the same history with the oil industry that Dornod Province has and as such, just as in previous years, thanks to its continued focus on positively engaging with local communities, Petro Matad has been able to secure all necessary permits to work on the land covering the highly prospective Raptor Trend and the Velociraptor prospect.
I’ve not read all the comments since the RNS so apologies if this has already been discussed but it sounds like we’ve been successful in being awarded further blocks for exploration.
I’m glad there is enthusiasm for participation in the fundraise, it should put the company on a solid footing for a big year ahead. Wish I had the funds to participate but alas I’ll just have to wait it out……again!
Good luck to you all.
Something interesting is that the pipeline for the new refinery is initially planned to transport oil from blocks XIX and XXI. Heron is located in block XX which is situated in between the refinery and the current producing blocks at XIX and XXI.
Once the pipeline and refinery are built, Heron and subsequent discoveries on block XX will have direct access to the refinery.
Might not mean anything to those waiting to jump out at 9p or 10p per share but might be valuable information to those looking for long term value.
Following from this link https://montsame.mn/en/read/297486
Processing capacity: 1.5 million tons of crude oil per year
Location: Altanshiree soum, Dornogobi aimag
Sources for crude oil: Toson Uul XIX, and Tamsag XXI sites
Product quality: MNS & EURO V
Annual operating hours: 8,000 hours
Deep processing technology: Hydrocracking, Visbreaking
Power source: TPP 35 MW/h
The oil refinery will produce:
• 339 thousand tons of gasoline,
• 824 thousand tons of diesel,
• 80 thousand tons of aviation fuel,
• 43 thousand tons of liquefied gas,
• 47 thousand tons of stove fuel.
Ojay, I know you as one of the strongest supporters of Matd. That’s why I was flabbergasted when a new poster to the forum accused you of being a trader.
Hope you are well sir and best wishes
Obviously sarcasm is not my strongest quality. Hopefully all the long term holders start to reap their rewards this year
Remember there is no point building a refinery if it has nothing to refine.
Thanks for that researchandhold. That’s good to know.
What else is good to know is that the “Country’s leading explorer”, is showing faith in itself and the potential oil discoveries waiting to be made in Mongolia, and Matd wants to be at the forefront of that or they would leave the other blocks for others to explore.
Little company, massive future…… If the Mongolian Government can get it’s act together, but the signs are there that things are taking a turn for the better.
GLA
I wonder how many of the 14 areas Matd applied for.
2022/23 Exploration Licencing Round
MRPAM has announced an Exploration Licencing round covering 14 blocks in the prospective fairways of the southern half of the country. These areas share the same stratigraphy and geological history as proven prolific oil basins of northern China. With its extensive data base, technical expertise and operational experience Petro Matad has a significant competitive advantage as the country's leading explorer and intends to participate in the licencing round with a view to signing some new production sharing contracts.
Current oil price circa $75-$80 . Matd’s NPV10 on Heron alone at current oil prices is $450million.
Local access permit gives Matd the key to access to that MPV10.
Not only that it means that Matd can finalise their current negotiation with DQE which indicates that DQE are willing to fund a multiple drill exploitation with an agreement to take payment from production revenue rather than upfront costs.
Heron has 60million barrels recoverable.
Velociraptor has an estimated 200million barrels recoverable(estimated). Fox and Phoenix have a further 600 million barrels recoverable (estimated).
4 or 5 pence per share is nothing.
The key is the local access to Heron. It’s the game changer. When that lands, the minimum price here should be at least 15p per share, just for the promise of initial production output.
Then there is diversification in to renewable energy, possible new blocks for exploration, further targets to exploit.
This is just the beginning.
When we get that local access which gives us the opportunity to monetise our assets then watch Matd fly.
2023 is the game changing year for us, in my opinion.
Happy new year everyone, let’s hope it’s the most prosperous of our lives so far.
Block V Exploration
On the Block V Exploration PSC area, local government approvals for land access have been secured. This area does not have the same history with the oil industry that Dornod Province has and as such, just as in previous years, thanks to its continued focus on positively engaging with local communities, Petro Matad has been able to secure all necessary permits to work on the land covering the highly prospective Raptor Trend and the Velociraptor prospect.
Just for fun while we are discussing dividends.
If Matd manage to prove up Velociraptor, Phoenix and Fox in block V with the estimated 800 million barrels recoverable then dividends would very much become a factor in the decision to invest here.
A 25 year exploitation licence with a ten year extension would mean that Matd would have to extract 440 thousand barrels per week to deplete its resources based on a 17% recovery.
I know it would take a phenomenal amount of wells and pipeline to make that happen but that is the amount of oil we are talking about.
Should we prove up that 800 million barrels then our NPV 10 at $60 per barrel would be $4.8 billion and $8 billion at $100 per barrel.
Next year could hint at some very big things for Matd.
Just for fun mind you
While we wait on permission for local access to Heron it may be prudent to remind ourselves of the potential in block V.
According to matd’s presentation in 2019 there are 3 targets in block V, Velociraptor, Phoenix and Fox all contained within the Tugrug basin.
Velociraptor will be drilled in 2023 with a mean estimate of 201 million barrels of recoverable oil.
Phoenix has 2 sites, Phoenix main with 230 million barrels and Phoenix West with 130 million barrels.
Fox has 2 targets, Fox main with 200 million barrels and Shallow Fox with between 10-40 million barrels.
That’s a total of circa 800 million barrels of recoverable oil if, and it’s a big IF, the targets prove to be commercial.
Based on a recovery rate of 17% then the Tugrug basin has between 4 and 5 billion barrels of oil in place.
Just something else to consider whilst we wait.
Keep warm folks, it’s cold out!
Matd’s initial recovery estimates on Heron were based on a recovery rate of 17% which gave an estimate of 33 million barrels. This was revised to 30% with the aid of advanced recovery techniques which gave 60 million barrels recoverable from 200 million barrels oil in place.
Velociraptor has a mean recovery estimate of 200 million barrels which means that using their base of 17% would provide that Velociraptor is huge with 1.2billion barrels oil in place.
Let’s hope it becomes the game changer it promises to be.
Have a nice week folks
Velociraptor is a large, shallow, inversion anticline in the Taats Basin with Mean Prospective Recoverable Resource potential of 201 MMbo. Work is progressing to secure the environmental permits for the drill site and for potential follow up locations along the Raptor trend.
It’s part of the PSC contract that Matd spend a required amount on exploration of defined areas, in this case it is block V.
There are high hopes for block V and Velociraptor was identified as a high prospect drilling site along with others.
‘On Block V, Velociraptor, Fox and Phoenix are high impact prospects that the Company has matured to drillable status in the Taats and Tugrug Basins where it has proved that active petroleum systems are present.’
Matd had 3 PSC contracts in blocks IV, V and XX.
Extensive 2D, 3D and use of other exploration techniques led Matd to release an RNS declaring that they estimated between 9 billion and 25 billion barrels of oil in blocks IV and V which led to the rise from 3p to 38p.
The then CEO entered into a death spiral finance agreement for drilling which destroyed the share price.
Step in Mike Buck who did two quick raises to finance drilling on block IV (Snow Leopard and another one I can’t remember, which were unsuccessful). We have since relinquished our interest in block IV.
He then turned his attention to block XX (Heron) and found light oil which flowed freely at a rate of over 800bpd. Initially estimated at a recoverable amount of 25 million barrels. NPV10 at this time was declared at $150m when oil was priced at $60 per barrel.
Updated estimates on recoverable oil at Heron is 60 million barrels which at current price of between $80-$100 per barrel provides an NPV 10 of between $480m and $600m.
COVID restrictions has played a major factor in advancing the company forward in that most of the expertise in drilling has been sourced from China and it is only in the last couple of days that covid restrictions have been eased.
Matd still has PSC contract obligations to fulfil in block V, hence the plan to drill Velociraptor in 2023. Should this be successful, then I would imagine the application and approval of the exploitation licence would be much more streamlined, after the problems Matd encountered on Heron.
The irony is that there are no local restrictions in Block V due to the fantastic local work carried out by Matd and there should be no identifiable barriers to exploitation on block V should oil be found.
It appears Petro China’s lack of environmental responsibility has badly hindered Matd’s progress in extraction of oil from Heron but hopefully that should be resolved soon with Ministerial approval.
We are in a good position, having $6 million available with additional financial support from Petrovis should we need it in bringing Heron into production and drilling Velociraptor.
All the equipment is in place at Heron and most of it is in place at Velociraptor. With covid restrictions easing and the likelihood of local access being granted soon then 2023 should see the re-rate we have been expecting.
Good luck fellow yaks, hopefully we have turned a corner and the only way is up.
I agree. Matd’s handling of the current decline in the share price has been sh*t. Absolutely no doubt about it, but the decline is also down to the worst scenario theories promulgated on this board by so called investors in this company.
I have mentioned before that this company was formed by their parent Petrovis who by all accounts and by their own admission are the largest oil distributor in Mongolia with 27% of the share. They have over 400, what we refer to as petrol stations in Mongolia. They are a successful company and despite the problems that are currently dominating Petro Matad and their situation going forward, there is no way that Petrovis are going to allow their baby to just wither and die.
I applaud the efforts of shareholders here doing what they can to influence the British ambassador to step in and highlight the issues facing Matd, but ultimately and most definitely, local access will be granted as Mongolia have taken a billion dollar loan to build their first refinery, which will remain redundant unless it has oil to refine.
Once again it is a waiting game. We are now not too far from the share price when Shell withdrew from the Joint Venture, when we had no oil.
By the way, what an awesome price to buy in at now. Local access will be granted at some point and there is no way Petrovis will let us wither and die, unless you believe that they can’t support their investment in Matd when they should be making record profits in this current bullish oil market.