Member Info for The_Gold_Mine

curiousandcuriouser: there is people opposed to oil and gas development everywhere there are oil and gas projects. I would not get sucked into worrying about it excessively.

We see it ourselves in the UK (Extinction Rebellion, Greens/SNP administration in Scotland, etc etc)... Fortunately when the financial imperitive becomes overwhelming the decision makers with budget responsibility (i.e. Central government) always tend to come down on the pragmatic side, e.g. that oil and gas is absolutely essential to our current way of life during the transition period, and high prices benefit no-one.

Think of the Shell Cambo field,... 12 months ago treated like the ugly sister at the dance, now a different story that energy prices have spiked and the government is practically begging O&G companies to up production.

I cannot see why Mongolia would be any different, the government have too much invested in their O&G industry for progress not to be made (refinery being built, pipeline contract awarded etc etc)

AIMHO/DYOR

mbarnholdt:

https://atradius.co.uk/article/risk-map.html

Posted by Mount Teide a couple of weeks back somewhere else...

Too much blah blah blah on this board, not enough reasoned debate about MATD.

Rampers
Derampers
Embittered crybabies

We have them all. A few genuine investors as well

master82: bringing on any new oil and gas project is a multi-year activity (in my experience), this has not been helped recently with COVID. I'm seeing a similar thing with Touchstone Exploration just now and it's Coho field. When these junior oilers are reliant on 3rd party companies and governments delays and setbacks seem to be almost a given.

I keep seeing people posting about other companies drilling, but I haven't seen any validation of comparison beyond that - the Elixir drill depth looks to be approx ~560m and 760m according to the RNSs, would such a drilling rig be appropriate for PetroMatad , who drilled Heron-1 to 2960m?

Manro: Why don't you sell up if you don't believe in the MATD investment case? Genuine question. I can see that at one point you had in believe in MATD as a share (going back several years) so why hang around if you are convinced you're on to a loser?

Dasha from MT, care to elaborate?

Bowley: On the subject of scheduling and future works, I took the opportunity to write to PetroMatad over the weekend and asked if they had considered looking at Russian or Ukrainian land rigs.

A recent Rystad Energy white paper titled “ONSHORE DRILLING – WHERE IS DEMAND HEADED” shows much lower rig utilization rates for Europe and Russia compared to Asia with the onset of the conflict in Ukraine.

For 2022 European and Russian land rig utilization rates will be ~43% comparing to Asian utilization rates of 75%. This gulf gets even wider next year (2023) with utilization rates in Asia remaining at about 73% with Russian and European land rig utilization rates dropping to about 28%.

The aforementioned white paper stated specifically that Ukraine land rig demand would drop by about 90% due to the conflict.

Therefore it would seem if ongoing issues arise with local drilling contractors potentially there could be benefits to Petro Matad to consider looking further afield, if this could be done without causing any problems with sanctions etc.

Possibly even some of the European / Russia rigs would be winterised also and may (possibly) not need to shut down during the winter season - if anybody has any spare time it would be worth suggesting this to PetroMatad as something to investigate (if you had nothing better to do with your time, like me, haha!).

Bowley. I understand the frustration about PM not committing to dates is frustrating for investors, however, the excuse for that is fairly watertight (shutdown of block 19 export facilities due to border closures with China, and closure of chinese border preventing drilling rig operations). PM has zero control over these issues.

I have seen the opposite happen, where the CEO promises the earth and then loses all credibility when self-imposed deadlines aren't met, due to issues outside of the companies control. (See situation with Touchstone Exploration just now with its Coho field - CEO was making statements like 'online in 60 days' after the discovery in 2019, it has now been close to 3 years since discovery and it is still not online, due to waiting on a 3rd party to build them a pipeline. Every 2-3 months the guy comes out with another "Just around the corner" statement - fairly laughable).

For me I'd rather have somebody credible who (in these circumstances only) does not make commitments to timelines, than make promises which is complete baloney. To do otherwise would only invite criticism when the deadline wasn't met.

However, under normal circumstances, I am in 100% agreement that scheduling information should be provided by the company, but I feel under the current circumstances this is not applicable.

The workover/stimulation of Heron-1 could still sneak in this year, the drilling season doesn't close until mid-November in Mongolia (as stated by Mike Buck in a previous presentation) and its a few weeks operation to get Heron-1 ready to go. That would leave just over 6 months to get the job done... A lot can happen in 6 months with a co-operative central government. The surface equipment is on order also,

Regardless if production comes on this year or next year I'm happy to be patient, as all signals point to an increasing oil price (or "supply crisis" according to some analysts).

AIMHO/DYOR

"THE DISTORTIONS OF CHEAP ENERGY" Natural Resource Market Commentary by Goehring & Rozencwajg predicts OPEC+ spare capacity will have run out by the end of the year.

-----

"The Oil Crisis Unfolding in Slow Motion

...Assuming Iranian volumes come back, Iraq boosts production and no other countries suffer unexpected outages (all very generous assumptions), we still estimate that OPEC+ spare capacity only amounts to 2.8 m b/d. Based upon our models, all of this capacity will be needed by the end of this year... The truth is no one knows what will happen when we run out of spare pumping capacity potentially this year. During the two oil crises of the 1970s, OPEC maintained significant spare capacity. Even when prices ran to $145 in 2008, OPEC’s spare pumping capability was substantial. Never in the history of world oil markets have we been in this situation--- we are about to enter unchartered territory...

We have argued for years that negative rhetoric and anemic spending would bring about an energy crisis, and we think that is now upon us."

-----

Thanks to Mount Teide who pasted the link originally on another site.
https://info.gorozen.com/2021-q4-market-commentary-the-distortions-of-cheap-energy

https://progressive-research.com/research/operational-update-2/

Mainly a repeat of the Operational Update RNS, however makes a couple of statements about scheduling that were not made in the RNS:

" This will leave the well ready to produce once export restrictions are lifted. " This is stated twice, and is a fairly big statement to make!!... and I 100% hope this is correct.

And it hints about another possible issue:

"This will leave Petro Matad in a position where it can, hopefully, secure the necessary land certificates in Blocks XX and V." This was touched on in the RNS and MATD have already said they will escalate to central government if problems arise...

However, it fails to mention the possible DQE partnership, which I feel is a big oversight, as a binding agreement to accelerate Heron development would (one would expect) certainly add a few % points onto the SP...

curiousandcuriouser: It reads to me like the directive issued means they do not need to wait for the law to change,

...The Cabinet of the Mongolian Government issued a resolution directing the certification of exploration and exploitation licences by the central Land Agency such that local approvals on land use are not required. We are advised by industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), that this will allow work on all Production Sharing Contracts (PSCs) areas to progress without land access delays

To me that reads like the biggest obstacle to getting Heron-1 online has been removed, there is the obvious problems with covid outwith of PMs control but that will get resolved in a month or two (I bet). PM will need that time to get the surface production equipment in location anyway.

AIMHO/DYOR

curiousandcuriouser: I have to give myself a pat on the back for this one, I read the situation bang-on and told everyone on the board :-
- PetroMatad having problems with local protestors/permit office/council
- PM Lobbying to central government to change the law to redress problems with current legislation.

Regarding the availability (or lack thereof) of land rigs, I hope that MB is looking at alternatives, in particular the situation in Russia and Ukraine should make land rigs available from those two areas... It sounds like Heron-1 for workover activities is not affected by the Chinese covid lockdowns, which is reassurring.

Master: You may be letting your nerves read a negative into the situation, keep in mind there was a lot of stuff on the table in terms of the DQE deal: geo-technical input, drilling, stimulation, and completion services, production operations and oil export. . also potential payment (or partial payment in oil). No doubt block V would need to be discussed a well... such a deal would take time to negotiate and then review the written T&Cs... probably some back and forth and lawyers reviews needed...

Bowley... The project you linked too looks to be in a completely different part of Mongolia, almost the southern most part?

https://i0.wp.com/tmkenergy.com.au/wp-content/uploads/2022/02/Fig.1_General-Location-Plan_Feb_2022_Gurvantes-XXXV.jpg?resize=1536%2C1040&ssl=1

Different location, different industry, different governor + local council, and different set of problems...

2 and a half months since the last operational update, we are overdue an update generally imo!

I note there seems to be a condescending attitude towards some posters keeping us updated of the developments with regards the facebook posting of local protest groups; I for one am grateful for any member who takes the time to both research and post information, even if I don't agree with their personal conclusions as to what it means for MATD.

I'm optimistic with MB reported as being in country that we can expect some news sometime this week,

ATB

Correct Knigel, thanks for pointing out my error.

Reminds me of a western oil and gas project I seen, the oil company had to go to outrageous lengths to buy off the local population... They were giving 6 figure sums to fishermen for "disruption" to fishing, etc, the problem was anyone who had a boat was claiming to be fisherman, there was all sorts of scams on the go, people were buying inflatables and claiming to be fisherman... The difference between that situation and this is Mongolia is sandwiched between Russia and China and nobody is queuing to setup shop in Mongolia, and also they need to start producing oil for their refinery + pipeline project,

master82: PM have told us in the last 2 RNSs they have petitioned the central government and it is going through the approvals procedure... From the last RNS

"At the same time, efforts are continuing apace to get the government to remedy the legal contradictions related to land access and usage issues that have previously impacted the work of Petro Matad and other operators in Mongolia. We are advised that proposed legal changes confirming land use rights, including input Petro Matad has provided, are working their way through the approvals processes within the central government."

I can only see one winner in this contest, the local council / permit office can play funny c__$ for a while, but the central government need new field development and exploration to ensure the oil supply to the refinery project + pipeline...

I'm hoping there is a dip on Monday and I will buy some more,

The lady in question has made another post 5 hours ago:

"The 20th square of oil, Petromatad company's BONNU Khatandalai LLC has a obligation to submit a resolution of the 13th resolution of 2020.07.06 to the Khatandalai LLC."

Looks like they want PM to resubmit something that has disappeared from (or was never originally put in) the archive from almost 2 years ago, this smells to me like a game of "lose the paperwork", the local council / permit office can keep tying things up indefinitely with these sorts of games (haven't followed procedure / paperwork got lost in the archive / meeting couldn't be held that day etc. etc.) then refusing to issue permits...

I think we need to keep in mind the following regarding the local permitting and local eco-protester problems:-

- Matad soum has a population of about 2500 people, or about 0.0004% of the population of Mongolia.
- There is a multi-billion dollar infrastructure project in progress (refinery + associated pipeline) which will bring energy security to the 3.3 million citizens of Mongolia

Does anyone believe that the Mongolian government will allow the local county council/permit office of a region with population of a couple of thousand people to derail its plans to bring energy security to the entire country?

The answer is obviously no - especially given the direction of travel of the oil price.

I don't have any concerns here, possibly in the worst case this may cause a short term delay, but in reality there can only be one winner in this contest - the needs of the several million will outweigh the needs of the couple of thousand.

If there is any dip in the SP I will be taking the opportunity to buy the dip and wait for reason to win out.