Petro Matad Limited Operational Update (2238O)
November 03 2016 - 3:00AM
UK Regulatory
TIDMMATD
RNS Number : 2238O
Petro Matad Limited
03 November 2016
3 November 2016
Petro Matad Limited
("Petro Matad" or the "Company")
Operational Update
The Company is pleased to provide the following update on recent
and planned activities.
Operational Update
The 2015-2016 acquired datasets have revealed additional new
prospective basins which have significantly expanded the Company's
basin portfolio. In summary, the Company's subsurface database in
Blocks IV and V now consists of 4,200 km of 2D seismic, 11,000
km(2) of Full Tensor Gradiometer and High Resolution Aeromagnetics,
full coverage of blocks with conventional gravity and magnetics,
two deep continuous stratigraphic coreholes, and extensive outcrop
geological data. The data has been used to establish a diversified
basin portfolio with multiple play types. Furthermore, the leads
and prospects inventory developed from the basin portfolio have
recently been peer reviewed and the process of high grading
prospects to drillable targets has been completed. Multiple
drillable targets have been identified and with this diversified
prospect portfolio the Company is now well positioned to work
towards finalization of next year's planned drilling program.
An initial two well wildcat exploration drilling programme is
expected to commence in mid-2017. The planned wells will be the
first basin and play opener wells in the frontier basins of Central
Mongolia, which is one of the last remaining untested exploration
areas in Central Asia. The primary objective of the wells will be
to target the proven oil producing Upper Jurassic-Lower Cretaceous
play found in the basins of eastern Mongolia (Tamtsag, East Gobi)
and eastern China (Hailar, Erlian, and Songliao). The secondary
objective is the deeper play of Permian-Jurassic in age, analogous
to the prolific systems of the western Chinese basins (Junggar,
Santanghu and Turpan). Further details on the planned exploration
program will be announced once specific drill locations have been
finalised.
The Company is currently evaluating rig options and has
conducted preliminary inspections of rigs capable of drilling to
the depth the Company anticipates will be required (3000-3500
metres). The findings to date are very encouraging as rigs of the
appropriate quality and standard are available within Mongolia and
neighbouring countries. The Company expects to release its drilling
tender before the end of 2016.
Financial Update
As previously notified, the Company has received a payment of
$10,005,303 from Shell's affiliate because of its exit from Blocks
IV and V. An additional $5,000,000, due upon approval of the
reassignment of interest, has not yet been received. The Mongolian
Government approval process requires sign-off at many levels before
the cabinet ultimately provides final approval, and this has been
delayed due to the Mongolian national elections in June and the
subsequent reorganization of government departments. We expect
approval will likely occur before the end of 2016. Upon receiving
government approval, Petro Matad's wholly owned affiliate (Central
Asian Petroleum Corporation Limited) will hold 100% of Blocks IV
and V.
The Company has undertaken cost cutting measures which are
expected to reduce G&A by approximately 30% over the remainder
of 2016 and 2017. The savings realized, even in the absence of
securing a farmout or additional funding, should enable the Company
to fully finance the 2017 work program, including the drilling of
two exploration wells.
PSC Extension
The Company recently met with the new Mongolian Government
Department responsible for regulating Production Sharing Contracts
- the Mineral Resources and Petroleum Authority of Mongolia (MRPAM)
- to present the exploration potential of our blocks. MRPAM was
very enthusiastic with the information provided to them and clearly
indicated that they are aligned with Petro Matad on exploration
strategy and are therefore supportive of an extension of Blocks IV
and V beyond the current term expiry (July 2017). In addition to
the two wells to be drilled in 2017, MRPAM recognizes that the
Company's quality portfolio of drillable prospects will require
additional time for drilling programs to be undertaken in 2018 and
beyond. Furthermore MRPAM understands the significance of a
drilling campaign in untested frontier basins in a region adjacent
to the prolific producing basins in China.
Commencement of Farmout Process
Petro Matad is pleased to announce that a formal farmout process
has commenced, for which working interests in the Company's three
blocks (IV, V and XX) will potentially be on offer. The Company is
of the view that sharing the risk of frontier exploration is a
prudent approach for conserving existing funds and accessing
additional funds, which will also allow for a more comprehensive
exploration effort to fully explore the Company's vast frontier
acreage. Several companies have already signed confidentiality
agreements and are currently reviewing the Company's technical
data.
Although the Company is in a position to finance the planned
2017 exploration program, the portfolio of quality drillable
prospects greatly exceeds the two planned wells in 2017, which
strongly argues for bringing in a partner to finance exploration
programs beyond next year. With the promising results seen to date
from the completed exploration work programs, Petro Matad is
confident that there will be significant interest in the
opportunity to farm in to one or more of the Company's blocks.
In support of the farmout effort, the Company is pleased to
announce that Philip Holloway has joined the Petro Matad team as
New Ventures Manager. Philip worked for BG Group (now Shell) for 26
years and was instrumental in BG Group's decision to farm-in to
Blocks IV and V in 2015. Philip has remained very optimistic on the
potential of the Company's portfolio and was keen to join Petro
Matad. In addition to leading the Company's farmout effort, Philip
is a proven explorationist so will also have significant input into
advancing the Company's exploration of Blocks IV and V.
Further, Petro Matad has signed a contract with Zebra Data
Sciences (ZDS), a United Kingdom based company that specializes in
running virtual datarooms and promoting oil and gas opportunities.
ZDS provides online technical data-showcasing services for farm-out
projects for the entire range of oil and gas companies. We expect
the engagement of ZDS will greatly enhance the visibility of the
Company's assets and consequently will result in a large number of
companies being aware of the exciting opportunity to acquire an
interest in our Mongolian blocks.
Launch of New Website
The Company is pleased to announce the launch of a new website
with the domain name www.petromatadgroup.com. Corporate information
published in accordance with the requirements of AIM Rule 26 is
available from this website.
Further announcements will be made in due course.
Further Information:
Petro Matad Limited
Ridvan Karpuz, CEO
+976 70141099 / +976 75751099
NOMAD and Broker
Stockdale Securities Limited
Richard Johnson / David Coaten
+44 (0)20 7601 6100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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