Petro Matad Limited (AIM:MATD, OTC:PRTDF) told investors that the Heron-1 well, in Eastern Mongolia, continued to deliver 200 barrels of oil per day of production and is awaiting the start of revenues in February.
The company said that production from the Heron well, located in Block XX, amounting to around 15,750 barrels, is presently stored in facilities on the neighbouring Block XIX – and, once a co-operation agreement is sealed oil sales can begin.
The agreement is in place and is awaiting signature and Petro Matad said it is expected to be finalised in February.
It highlighted that the agreement is favourable and would see Petro Matad receive $40 of net back on oil sold at $70 per barrel.
Oil in storage is expected to yield around $600,000 net to Petro Matad, it said.
"We are very pleased to see Heron-1 maintaining production and showing potential to increase its flow rate with some low-cost modifications,” chief executive Mike Buck said.
“It is also good to see a sizeable inventory of Block XX oil accumulating at TA-1 and we are pushing for sign-off on the Cooperation Agreement to trigger the start of sales revenue.”
Petro Matad, meanwhile, added that it has expanded its footprint in Mongolia with the inking of the Borzon Block VII which spans some 41,141 square kilometres in Southern Mongolia.
It opens with early-stage exploration commitments for 2025 including mapping activities, and the company noted that the first two years will see a total budget of $980,000.
“The signing of Block VII adds some high-quality exploration acreage to our portfolio,” Mike Buck said.
“The reward potential and risk profile that Block VII offers are very attractive and we hope to be able to bring in partners to join us in exploring this exciting new area.
“We are also hopeful that the signing of our next new PSC will follow shortly and I look forward to updating shareholders".