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.
Hanson Westhouse says Petro Matad highly geared towards exploration success
Petro Matad’s (AIM: MATD) broker and nominated advisor (‘Nomad’), Hanson Westhouse, commented in a recent note that the junior oil and gas exploration and production company was highly geared towards exploration success at the Davsan Tolgoi prospect in Mongolia.
Petro Matad is planning to drill up to six wells, commencing in summer 2009, after completing extensive seismic acquisition and interpretation over Block XX in the Tamstag Basin, which identified several high priority targets.
According to Hanson Westhouse, two wells are likely to be drilled into the Davsan Tolgoi prospect, with a further well each at the Davson Tolgoi North and West prospects. Hanson Westhouse estimates the Net Present Value (“NPV”) of the Davsan Prospect alone is US$387 million, based on a US$45 oil price escalated at 2.5% and using a 10% discount factor. . Petro Matad has not confirmed any drill locations yet.
Another notable point highlighted by Petro Matad’s broker was the close proximity of the Tolson Uul oilfields in Block XIX (adjacent to Block XX) operated by PetroChina. PetroChina has reported production of 3,300 barrels of oil per day, and it has been reported that the Chinese oil giant is planning to drill 390 wells in 2009 at a cost of US$560 million.
Overall, Hanson Westhouse stated that the Davsan Tolgoi prospect offered very high gearing to exploration success, strengthened by the close location to producing fields, extensive 3D seismic and proof that the hydrocarbon system on Block XIX extends to Block XX.
