TIDMMATD
RNS Number : 6544K
Petro Matad Limited
12 April 2018
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.
12 April 2018
Petro Matad Limited
("Petro Matad" or the "Company")
Operational Update
Petro Matad, the AIM quoted Mongolian oil explorer, is pleased
to provide an operational update for its planned 2018 exploration
drilling programme:
Highlights
-- Interpretation of high quality 3D Seismic data in the Tugrug basin ongoing
-- High quality data has identified bright amplitude anomalies
which are very encouraging for hydrocarbon prospectivity
-- Falcon prospect shown to be smaller than initially
anticipated and removed from the drilling programme whilst other
more promising prospects identified in the Tugrug basin are
analysed and high-graded
-- 90 MMbo Snow Leopard prospect (Block V) to be spudded first,
with well site civil works commencing in May 2018 and required
permitting anticipated to be finalised by the end April 2018. Rig
fully contracted and certified
-- The 290 MMbo Wild Horse Prospect (Block IV) will be drilled
following Snow Leopard, with permitting progressing as planned
-- The tender process for a rig for Block XX drilling is near
completion with drilling anticipated to commence in H2 2018
Block V - High quality 3D seismic survey being interpreted with
potential direct hydrocarbon indication and bright amplitudes
The Tugrug 3D seismic volume has been under interpretation
throughout the months of March and April 2018. The frequency
content of the data is excellent with clear definition of both
structural and stratigraphic architecture. The fault plane
reflections are remarkably well-defined aiding significantly in the
mapping of the complex fault pattern in the area of the Falcon
prospect. Preliminary seismic attribute mapping shows good
resolution of sedimentary features and potential stratigraphic play
fairways.
Based on results so far, with much better resolution of the
faulting, it is apparent that the fault block originally targeted
for drilling at the centre of the Falcon cluster is smaller than
previously mapped. The new data does confirm, however, a large and
well-defined fault bounded structure to the East that is
considerably larger than the original mapping of Falcon and bright
basin centre channelised features are potentially lacustrine
turbidites, a proven prolific play type in other lacustrine basins
globally. More detailed work is needed on the acquired data to
mature these prospects identified by the 3D to drillable
status.
Amplitude anomalies have been observed in trapping
configurations and so far the interpretation has revealed a
particularly convincing flat spot in a sinuous channel feature some
2.5km southeast of the Falcon fault block and some bright channel
features in the basin centre. Flat spots can be the seismic
response from fluid contacts and the observed anomaly will be
further investigated with some targeted special processing. Bright
amplitudes are also observed near the major normal faults which may
be an indication that these faults are acting as conduits for
migrating hydrocarbons and, if so, further highlights the
prospective nature of the Tugrug Basin which is believed to have
sourced the live oil encountered in the TSC core hole on the basin
edge.
Interpretation is now focused on completing the first pass
prospect generation phase to identify the most prospective
locations within the Tugrug Basin and to mature them to drillable
status
2018 drilling - reordered drilling programme ensures exploration
drilling will commence in Q2 2018
Recognising the need to fully work up the targets in the area
covered by the new 3D data set, the Company has decided to defer
drilling in the Tugrug Basin in Block V and to advance the drilling
of the Snow Leopard prospect in to Q2 2018. Snow Leopard, in the
Taats Basin in Block V, is a robust fault bounded structure, well
covered by good quality 2D seismic data in an area where there is
much less structural complexity when compared to the Tugrug Basin.
Whilst there is excellent evidence for a working petroleum system
in the Tugrug Basin, the adjacent Taats Basin, in which Snow
Leopard is the primary target, has confirmed source and reservoir
outcrops on the basin flanks which can be mapped on seismic to
thicken into the basin centre giving a good chance for a generative
petroleum system to be present. The Snow Leopard prospect itself
has two primary targets with a cumulative estimate of 90MMbo of
prospective recoverable resources and three secondary targets that
will be penetrated by the well. One of these targets will provide
data on a high potential lacustrine turbidite play fairway.
Snow Leopard was originally programmed for drilling in 2017 and
has all the required permits in hand other than the land use permit
which is now being renewed. The renewal is a routine matter and as
such the Company expects to have the new permit within the month of
April 2018. As previously reported, the contracted Sinopec Rig 4518
is in Mongolia and has been certified to international standards.
Drilling consumables and long-lead items including casing and
wellhead are also now in Mongolia and are ready to be mobilised to
site. Plans are for site construction to commence in May 2018 with
rig mobilisation commencing once the Snow Leopard location has been
completed. The well is programmed to be drilled to a depth of circa
3,350 metres at a cost of approximately $7 million, of which $1
million was spent in 2017 for purchase of long lead items and
consumables. It is expected that the well will take approximately
70 days to drill and log.
To optimize logistics for the 2018 drilling programme in Blocks
IV and V, Snow Leopard will be drilled first followed by Wild Horse
in the Baatsagaan Basin in Block IV. The permitting of Wild Horse
is progressing well. The Detailed Environmental Impact Assessment,
the most time consuming to prepare of the permits required, has
been conditionally approved by the Ministry of Environment and
formal paperwork finalising the approval is due to be issued
imminently. With this approval in hand, applications to secure
chemical and land use permits will be completed and submitted. The
Wild Horse well is targeting a 290 MMbo prospect.
An accelerated tender process for a drilling rig for Block XX is
nearing completion. Based on progress so far, the Company expects
to secure a good quality contractor with a tried and trusted rig
and crew for drilling as early in the second half of the year as
possible.
Further announcements will be made in due course.
Mike Buck, the CEO of Petro Matad said: "The Company's decision
to shoot 3D seismic over the structurally complex Tugrug Basin was
a good one. The new mapping on the 3D indicates that we have some
excellent targets but we do not wish to delay our exploration
efforts in 2018 whilst they are matured to drillable status. Snow
Leopard and Wild Horse are two large, well defined and exciting
prospects with huge follow up potential. As the firm two well
programme for Blocks IV and V in 2018, they will tell us a lot more
about the potential of the area and we are moving ahead rapidly
with preparations to start drilling during this quarter. Planning,
procurement and permitting for drilling in Block XX are also
advancing well."
For more information, please contact:
Petro Matad Limited
+97 670 141 099 / +97
Mike Buck, CEO 675 751 099
Stockdale Securities Limited (Nominated Adviser
and Broker)
Richard Johnson
Andy Crossley
El Hanan Lee +44 (0) 20 7601 6100
Stifel Nicolaus Europe
Limited (Broker)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield +44 (0) 20 7710 7459
FTI Consulting (Communications Advisory Firm)
Edward Westropp +44 (0) 20 3727 1521
All Reserves and Resources definitions and estimates in this
announcement are based on the 2007 SPE/AAPG/WPC/SPEE Petroleum
Resource Management System ("PRMS").
Technical information in this announcement has been reviewed by
the Company's internal qualified geoscience experts.
Glossary
MMbo million barrels of oil
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
TD total depth
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 the sole
operatorship of three Production Sharing Contracts with the
Government of Mongolia. Block XX has an area of 10,340 km(2) 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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