RE: $175k for 1000% increase 📈📈📈1 May 2026 15:43
According to Petro Matad's technical presentations and recent operational updates, the estimated cost of radial drilling (cost-effective production enhancement) is approximately $175,000 per well.
This cost is part of the company's "low-cost" development strategy for the Heron field in Mongolia and is significant for several reasons:
Cost and Technical Breakdown
• Total Cost: $175,000 per well (this figure includes the share of mobilization and demobilization costs for the equipment).
• Operational Scope: The technique involves drilling four horizontal laterals (each 100 meters long with a 2-inch diameter) through the existing well casing.
• Relative Cost: At current production levels, management has noted that this cost represents roughly 9 days of revenue for the company.
Strategic Value
Petro Matad is targeting this technology for wells with lower permeability or those that did not initially flow at commercial rates (such as Heron-2). The expected benefits include:
• Flow Rate Improvement: Potential to increase flow rates by up to 1,000% in tighter reservoirs.
• Recovery Factor: An estimated increase in ultimate well recovery of 20% to 30%.
• Efficiency: The company views this as a high-value alternative to drilling entirely new wells, which are estimated to cost roughly $2 million to $2.5 million each.
The technology is particularly relevant as the company focuses on reaching a "virtuous circle" where production from existing wells like Heron-1 (averaging ~161 bopd in 2025) provides the free cash flow to fund these enhancement activities without further dilutive capital raises.
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