THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY PETRO MATAD LIMITED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
5 August 2019
Petro Matad Limited
Spud of the Red Deer-1 Exploration Well and Heron-1 Well update
Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil explorer, announces that the Red Deer-1 exploration well in the Asgat Sag Basin of Block XX in eastern Mongolia spudded on 4 August. The well is being drilled with the Daton Petroleum Engineering and Oilfield Service LLC rig, DXZ1.
The Red Deer-1 well is targeting a prospect with 48MMbo of Mean Prospective Recoverable Resource and is planned to be drilled to a total depth (TD) of 2,100 metres. The well is expected to take up to 35 days to complete. In the event of a discovery, the Company will bring in a separate rig for testing. A call-off testing contract has been signed which ensures testing operations, if warranted, can commence soon after discovery.
Meanwhile, at Heron-1, the first casing point at 551 metres was reached on schedule and casing has been run and cemented. The DQE rig 40105 is now ready to drill out cement and then drill 8 ½ inch hole to the prognosed TD of 3,050 metres. However, the provincial government has challenged Petro Matad's legal right to use the land at Heron-1 on the basis that a tripartite agreement between two central government agencies and the province has not been executed. In all of Petro Matad's operations the Company has followed the land permitting regulations as required under the PSC and in accordance with instructions from the Ministry of Mining and the industry regulator MRPAM. The absence of a tripartite land use agreement between government agencies has never previously been an issue. We are working with the Ministry, MRPAM and the provincial government to remedy this situation as soon as possible.
The rig at Heron-1 has been put on standby whilst the situation is resolved. All efforts are currently directed at fixing this interruption as quickly as possible in order to minimise rig standby costs. Daily standby costs are low by industry standards and are of the order of $12,000. The Red Deer-1 well is located in a different province to that in which Heron-1 is located and has not been affected.
Further updates will be provided in due course.
Further information please contact:
Petro Matad Limited |
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Mike Buck, CEO |
+976 7014 1099 / +976 7575 1099 |
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Shore Capital (Nominated Adviser and Broker) |
Richard Johnson Andy Crossley David Coaten |
+44 (0) 20 7408 4090 |
Stifel Nicolaus Europe Limited (Broker) |
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Callum Stewart Nicholas Rhodes Ashton Clanfield |
+44 (0) 20 7710 7600 |
FTI Consulting (Communications Advisory Firm) |
Sara Powell Ben Brewerton Genevieve Ryan |
+44 (0) 20 3727 1000 |
All Reserves and Resources definitions and estimates shown in this report are based on the SPE/AAPG/WPC/SPEE Petroleum Resource Management System ("PRMS").
Technical information in this news release has been reviewed by the Company's Exploration Manager, Mr. Jerry Smart. He has 37 years of industry experience in oil and gas exploration and production with LASMO, Eni, Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's College, London.
Glossary
MMbo Million barrels of oil
Mean The arithmetic average of the low, mid and high case estimates of recoverable prospective resources
Prospective Resources Estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled
About Petro Matad
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 100% working interest and the operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,367 square kilometres in the far eastern part of the country and Blocks IV and V have an area of 29,062 square kilometres and 21,143 square kilometres, respectively, in the central western 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.
