www.petromatad.com
Petro Matad is the parent company of a group focused on oil exploration, as well as future development and production in Mongolia. The Group’s principal asset is the Production Sharing Contract (PSC) over Matad Block XX, a petroleum block with an area of 14,250km2 in the far eastern part of Mongolia, near the Chinese border. Recently the company signed two more Production Sharing Contracts on Bogd Block IV and Ongi Block V, a total of approximately 71,000km² in central Mongolia. Petro Matad Limited’s shares were admitted to trading on AIM, London Stock Exchange, on May 1st, 2008. The company’s largest shareholder is Petrovis LLC, the largest importer and distributor of petroleum products in Mongolia. The company is the first substantially Mongolian owned company to have its shares admitted to trading on any major international stock exchange.
Petro Matad reflects on important progress in 2009 as 2010 exploration advances in Mongolia
In its results for FY09, Petro Matad (LON:MATD) reported it has accomplished a great deal in an important year. Financing and equipment are now in place to progress exploration activities in Mongolia, with drilling now underway on Block XX, and exploration work continuing on Blocks IV and V.
The company said it was able to capitalise on the improvement in market sentiment in the second half of 2009, by returning to equity markets and successfully funding the company’s advancement. In the twelve months ended 31 December 2009, the company raised US$12.5m.
In terms of the new investment, Petro Matad said its largest shareholder, Petrovis LLC, acted as an “important cornerstone investor” and the Mongolian-based private corporation’s chief executive Ms D Enkhchimeg joined the Petro Matad board as a non-executive director.
The company also added another significant investor, theEuropean Bank for Reconstruction and Development (EBRD), which agreed to invest US$6m. EBRD’s Mary Ellen Collins joined the board as part of the subscription.
The company believes it is sufficiently funded to proceed with its exploration programme and to take advantage of the opportunities presented by its three exploration blocks - Block XX, Block IV and Block V. In the current financial year, Petro Matad has been advancing its exploration efforts.
In recent weeks, since the end of the winter season in Mongolia, the company has made considerable strides, particularly on the XX Block. Yesterday, the company reported the spudding of the Davsan Tolgoi-1 (DT-1) exploration well, the first to be drilled in the 2010 campaign. DT-1 is being drilled vertically to an estimated target depth of approximately 1,440 metres, and drilling is expected to take 30 days to complete.
In response to the announcement, Westhouse Securities had said that Petro Matad “offers exposure to a unique exploration opportunity with a high gearing to success”. The broker highlighted an estimate by independent consultant, Isis Petroleum, with states the mean un-risked prospective resource of the Davsan Tolgoi prospect at 122m barrels, with a 37% probability of success.
The first well of the campaign, DT-1, will be followed by DT-2 and DT-3. “Together with DT-1, the wells are sited to target separate local structural closures with independent geological risk components”, Petro Matad stated.
The company said that DT-2 will test a deeper feature, west of DT-1, lying up-dip from recent deep basin discoveries on Block XIX, which is owned and operated by Daqing Oilfields Ltd. Meanwhile, DT-3 will test a discrete local closure along the crest of the Greater Davsan Tolgoi area.
Petro Matad also highlighted that it will look beyond the Davsan Tolgoi area of Block XX. “The current drilling and most of the past exploration of Block XX has focused on the near the northern boundary of the Block ... in 2010-11 [we] will focus on the acquisition of 200km of additional 2D seismic data and infill gravity data in the South Sharabog, Asgat, Erdenetsagaan and East Erdenetsagaangraben areas of the southern and western part of the Block.”
Yesterday, Westhouse noted that there are 14 other prospects in the current Block XX inventory, with a mean un-risked prospective resource estimate of 516m barrels.
In July 2009, Petro Matad was awarded two new Production Sharing Contracts (PSC), by the Petroleum Authority of Mongolia, adding the adjoined Bogd Block IV and Ongi Block V, which jointly cover approximately 71,000 km².
“PSCs for Blocks IV and V add a further dimension to the company's portfolio of opportunities, and preliminary evaluation work has already commenced.”
During FY09, the company compiled a database of geological and gravity data, collected in previous studies by the Mongolian government, and that database is being supplemented with acquisition of an additional 4,500 infill gravity stations. Also, an initial 400km 2D seismic acquisition will commence in mid-July, to image both regional and prospect scale features that have been highlighted by surface geology and gravity.
Also during 2009, the company expanded its in-house technical team with Rodney Graham joining as head of operations. Rod Graham subsequently brought on-board Dr James Coogan as exploration manager, as well as Dr Kurt Constenius as chief geophysicist and Justin Tully as geologist.
