Last checked at 3 Feb 2016 08:57
3 February 2016
Petro Matad Limited
("Petro Matad" or the "Company")
Operational Update
Further to the Company's announcement on 29 October 2015, regarding the completion of the airborne full tensor gradiometry (FTG) and high resolution aeromagnetics (HRAM) data acquisition and processing services and the 2D seismic acquisition programme then underway, the Company is pleased to provide a further operational update on current and planned activities.
The processing and interpretation of FTG and HRAM data is ongoing and the Company is very happy with the results to date as they have allowed better definition of prospective basin areas where exploration activities will be focused to identify wildcat drilling locations. These data not only enable fine-tuning and optimisation of the seismic acquisition programme but will also integrate with the seismic data to enable the Company's technical teams to high-grade prospects for drilling.
The 2D seismic acquisition programme in Block IV has been completed with 1,085 km of new data being acquired. A preliminary review of the combined FTG - HRAM and Block IV seismic data shows a substantial number of deep basins with prospective structural and stratigraphic play types. The Company is planning to acquire up to 200 kms of additional infill seismic in Block IV to optimise future well locations to test the petroleum system and presence of moveable hydrocarbons in this frontier exploration region of Mongolia.
Initially, the Company had planned to continue with Block V seismic acquisition immediately after the completion of the Block IV seismic programme. However, in consultation with our Joint Venture partner, BG Group, a decision was made to suspend the programme for the remaining winter months. Accordingly, the Company will recommence seismic acquisition in May, at which time an estimated 952 km of seismic will be acquired in Block V along with the aforementioned circa 200 km of infill seismic in Block IV which will be designed to further mature identified leads to drillable prospect status.
In order to allow for the full acquisition, integration and interpretation of all old and new data before finalising the selection of drilling targets, the Company now plans to drill two exploration wells in 2017. This is a change from the previously announced plan to drill one well in each of 2016 and 2017. While the winter break in the seismic programme has caused some delay, the more important factor in the decision to delay exploration drilling until 2017 is the exciting results seen from data acquired so far. It is apparent that there will be multiple potential drilling targets and with the substantial amounts of new data yet to be interpreted and peer reviewed, it is prudent to take the extra time to ensure the best prospects are matured for drilling in 2017. Drilling two exploration wells back to back in 2017 will also result in operational and financial efficiencies.
Concurrent with seismic acquisition and interpretation in 2016 the Company will further prepare for drilling exploration wells in 2017 by purchasing long-lead items such as wellheads and casing. Well engineering work will continue throughout 2016 on planning and designing a robust drilling programme to be able to safely and effectively drill the wells.
The Company issued a drilling rig pre-qualification document in the fourth quarter of 2015 and the feedback received was encouraging. It is apparent that there are a number of prospective and qualified international service providers that will be able to execute a drilling programme that meet the Company's high standards.
Although the dramatic decrease in the oil price has profoundly affected the oil and gas industry on a world-wide basis, there has been no detrimental impact on the Company's operations. In fact, the availability of services and rigs is such that the Company expects to be able to drill the planned exploration wells at a substantial discount to the cost that would have been incurred in previous years.
The Company remains committed to drill exploration wells at a plus 3000 metre depth in West/Central Mongolia and is excited by being the first to test this new frontier, especially in light of the basins and structures observed from the data acquisition programmes in 2015. The Company is confident that additional areas for potential drilling will be seen from the results of Block V seismic acquisition later this year.
Further announcements will be made as major milestones are achieved.
Commenting, Enkhmaa Davaanyam, Petro Matad Chairperson, said:
"I am very pleased with the operational progress being achieved and the data quality observed to date in the Company's FTG and seismic acquisition programmes. I am confident that once the Petro Matad team has integrated the new data with the existing database, a number of exciting drillable prospects will emerge from the many leads already seen from data acquired so far and yet to be acquired. The delay in drilling is fully warranted as the extra time will ensure that the best prospects are drilled commencing in the second quarter of 2017."
About Petro Matad Limited
Petro Matad is the parent Company of a group focused 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
Ridvan Karpuz, CEO
+976 70141099 / +976 75751099
NOMAD and Broker
Stockdale Securities Limited
Alastair Stratton / Robert Finlay / David Coaten
+44 (0)20 7601 6100