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 shares soar on more news from DT-1 oil discovery in Mongolia
Petro Matad (LON:MATD) has provided investors with more details on its new oil discovery in Mongolia, the Davsan Tolgoi-1 (DT-1) exploration well. in the XX block. Itha as now reached a final measured depth of 1,220m, and passed through the Tsagaantsav formation from 1,075-1,146m, before entering into metamorphic basement.
"To have achieved success on the first well has been a significant achievement ... DT-1 has gone a long way towards proving that the Davsan Tolgoi Prospect is, in total, as viable a target as first hypothesised”, Petro Matad chief executive Douglas McGay commented.
DT-1 encountered oil shows and elevated mud gas through the entire 71m section “with indications of live oil through six sandstone and conglomerate units totalling about 35m in aggregate”. Furthermore, the company highlighted that several intervals included “very good shows” that included cut, fluorescence, oil staining and a strong petroliferous odour. “Good reservoir quality is indicated by fast drilling breaks through all sandstone and conglomerate intervals.”
Petro Matad shares surged over 54% in late afternoon trade today following the announcement, adding further value after rising strongly earlier this week upon the initial discovery. After starting the week below 60p per share, the DT-1 discovery has fuelled investor confidence and shares were changing hands at 139.75p just before the close.
The company noted that when it initially reported the discovery - 13 July 2010 - the oil shows were thought to be from the lower Zuunbayan formation. However following further analysis Petro Matad confirmed that they were in fact from Tsagaantsav reservoirs: “these intervals consist of volcaniclastic sandstone and conglomerates that are characteristic of Tsagaantsav reservoirs.”
Subsequently, 3D seismic prognosis has been re-interpreted, utilising the actual downhole observations, and the analysis corroborates that the well is drilled in the structural crest of “the local four-way closure, with progressively thickening lower Tsagaantsav sandstones eastwards from the well”.
Petro Matad will now carry out wireline logging on DT-1 before the rig moves to drill DT-2.
“Not only have we encountered significant hydrocarbons, the increase in our scientific knowledge will lessen the risks associated with further wells. It also adds confidence to our assessment of the other leads and prospects on Block XX, and the other six sub-basins in Block XX that are still to be explored and tested”, McGay added.
Next, the company plans to drill the second DT well, 4km to the west. DT-2 will be drilled deeper, to 2,000m, in order to test the lower Tsagaantsav formation.
Petro Matad is the parent company of a group focused on oil exploration, as well as future development and production in Mongolia. The group holds the sole operatorship of three PSCs with the government of Mongolia. The principal asset is the PSC for Block XX, a petroleum block of 14,250km² in the far eastern part of the country. The two other blocks, IV and V are located in central Mongolia and jointly cover 73,498km².
