Last checked at 22 Jun 2015 07:00
22 June 2015
Petro Matad Limited
("Petro Matad" or the "Company")
Unconditional status of Farm-out agreement for Block IV and Block V, Central Mongolia and Operational Update
Following the 11 June 2015 announcement by the Company with regard to obtaining Mongolian Government approval for the farm-out of Blocks IV and V, the Board of Directors of Petro Matad is pleased to announce that the final condition to the farm-out becoming unconditional has been waived by BG Group. The farm-out has therefore achieved unconditional status.
$2,750,000 cash consideration has been received today from BG Group and the transfer of 78% working interest in Blocks IV and V to BG Group has now completed. An additional $1.8 million cash consideration is to be received over the next thirty months - $300,000 of which will be received shortly, with the balance being received in increments of $50,000 per month.
In recognition of the completion of the farm-out an official signing ceremony took place earlier today in Ulaanbaatar with the British Ambassador to Mongolia and representatives from the Mongolian Government, BG Group and Petro Matad in attendance.
The key terms of the farmout were previously announced by the Company on 7 April 2015.
Operational Update:
As announced on 7 April, the agreed work programme under the farmout agreement is:
· Airborne Full Tensor Gradiometer (FTG) and High Resolution Aeromagnetics;
· 2,000 km of 2D seismic acquisition;
· Two 1,500-2000m core holes; and
· Two 3,500m exploration wells.
The announcement of 7 April 2015 anticipated that all work programme activities, except one of the exploration wells, would be completed in 2015. The Company now anticipates that both exploration wells will be drilled in 2016, with the remaining work programme activities still being undertaken in 2015. The drilling of both exploration wells in 2016 will provide additional time for the new data arising from this year's work programme to positively influence the location of the wells.
Tenders for FTG, seismic and core hole drilling have been issued and evaluation of the bids is under way. The Company will be in position to formally award contracts on a phased basis over the next few weeks. The tender for the exploration wells is expected to be issued during the third quarter of 2015.
Further announcements will be made as major contracts are awarded.
Commenting, Dr Oyungerel Janchiv, Petro Matad Acting Chairperson, said:
"I am very pleased to announce that the farmout has attained unconditional status which means we will be able to proceed as planned with the proposed work programme. The previously announced approval by the Mongolian Government is also very much appreciated and is another demonstration of the commitment to develop the country's oil and gas resources. As a result of this transaction Petro Matad will be fully funded in relation to the remaining licence commitments on Blocks IV & V".
About Petro Matad Limited
Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds the sole operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,340 km² in the far eastern part of the country, and Blocks IV and V have an area of 28,900 km2 and 21,100 km2, respectively, in the southwest part of the country.
Petro Matad Limited is incorporated in the Isle of Man under company number 1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle of Man, IM1 1EQ.
Further Information:
Petro Matad Limited
John Henriksen, CFO
+976 11 331099
NOMAD and Broker
Westhouse Securities Limited
Alastair Stratton / Martin Davison
+44 (0)20 7601 6100
Financial Advisor in relation to the transaction
Macquarie Capital (Europe) Limited
Jon Fitzpatrick / Luke Kanczes
+44 (0)20 3037 2000