Petro Matad gets ready to re-start exploration after worst of Mongolian winter

Petro Matad (LON:MATD) is preparing to resume work on Block XX, where it made three consecutive oil discoveries last year before the worst of the Mongolian winter closed in.

In December a specially ‘winterised’ drill rig drilled the Davsan Tolgoi 4 (DT4) well to a depth of 1,271, just above the exploration target and the wells 2,020 metre target depth. It was then suspended with an orderly shut-down and the well was put into ‘hibernation’.

"During the past three months the company has made excellent progress in both its exploration activities as reported above, and also at a corporate level,” chief executive Douglas McGay said.

"It is noteworthy that we are advancing our field exploration activities further into both ends of the harsh Mongolian winter.  In 2010 we drilled well after the onset of winter, and in 2011 we are commencing drilling and seismic surveys before winter ends.  

“The company is working towards an all-year round operation for the first time in Mongolian oil exploration history.” McGay also stressed that the work over the winter gives Petro Matad a firm foundation for a very active and productive 2011 programme.

With the worst of the winter conditions behind it the company is preparing to restart drilling next month, testing operations are expected to start in May - when both day and night temperatures are above freezing.

Meanwhile 1,000 kilometre 2D seismic survey is due to begin over the next few days. The survey will in-fill over existing leads and prospects in the north of the Block XX. It will also explore six grabens in the central and southern parts of the Block. 

The seismic programme is expected to take between six to eight weeks to complete.

Petro Matad emphasised that the three successful exploration wells extended known hydrocarbon occurrences by a significant distance southward into Block XX. It said that the seismic programme is designed to test for new plays in the central and southern sub-basins.

It is also remapping and reinterpreting its existing 3D seismic in light of 2010’s drilling success. The company said that it will enable a complete review of the structural and stratigraphic composition of Davsan Tolgoi, along with volumes and risking factors of the prospect.

This seismic reinterpretation will be a significant factor in the planning of the 2011 drilling programme, the company said.

Elsewhere at the less explored Blocks IV and V exploration work is already underway with Major Drilling Group (TSE:MDI) carrying out stratigraphic drilling.

Here the company will retrieve at least 1,500 metres of diamond-drill core, which will be used to define ‘factual constraints’ for the 2D seismic the company shot in 2010. Petro Matad said that this kind of drilling is an essential step in it exploration of Blocks IV and V because there has been no previous oil exploration in the region. 

The stratigraphic drilling began earlier this week and it is expected to take six to eight weeks for each hole that is drilled.

The company has also been interpreting the last year’s geological and geophysical results over the winter and once this has been completed it will finalise an exploration programme for the rest of 2011.

On a corporate level Petro Matad has kept itself busy too, with the creation of an in-house, in-country  drilling department.

“The establishment of a Drilling Department is another step in the development of Petro Matad,” McGay added.

“This department will supply management, design, procurement and supervision of our drilling operations.  It is another first for the Mongolian oil sector, with a home-grown company leading the way by establishing international standard in-country expertise in oil exploration.”