Petro Matad, the AIM quoted Mongolian oil explorer, has provided an operational update for its planned 2018 exploration drilling programme:
· Environmental permitting for Snow Leopard 1 complete
· Notice to mobilise the rig has been issued and site preparation is underway
· Snow Leopard 1 in Block V (90MMbo resource potential), now expected to spud in July 2018
· An attractive new prospect, Fox, with 200MMbo resource potential has been mapped on the recently acquired Tugrug basin 3D seismic
· Wild Horse prospect (Block IV) resource potential upgraded from 290MMbo to 490MMbo based on revised mapping and volumetric assessment
2018 drilling - Mobilisation underway
Permitting for the Snow Leopard 1 well has been completed and the notice to mobilise the rig has been issued to Sinopec. The rig and consumable materials are already in Mongolia. Sinopec is now moving logging and cementing units from China and will move all equipment to site once the drill site construction has been completed.
Unfortunately, there has been a delay in obtaining foreign worker visas for the Sinopec drilling team and this will likely move the spud of Snow Leopard 1 into July 2018. This will not, however, impact Petro Matad's ability to drill both Snow Leopard and Wild Horse during the 2018 drilling season based on our best estimates of well duration.
Permitting for the Wild Horse 1 well is nearing completion. The Detailed Environmental Impact Assessment is approved and chemical permits are progressing. Completion of permitting should facilitate a seamless move from Snow Leopard 1 to Wild Horse 1, avoiding any unnecessary delay or standby costs.
On Block XX, the rig tender process has been completed and results are under review. Permitting is progressing smoothly and we are on schedule to drill in late Q3 or early Q4 2018 depending largely on the exact timing of rig availability.
Prospect evaluation - 3D seismic interpretation progressing, defining a new, attractive prospect in the Tugrug Basin
Interpretation of the Tugrug Basin 3D seismic volume is continuing. A well-defined structure in the basin centre, located within 5 kilometres of the Falcon fault terrace, has been worked up as a candidate for future drilling. The trap is large, with an area greater than 15 square kilometres comprising a dip closed fault bounded high with a thick section of what is interpreted to be Jurassic and Cretaceous reservoir and source rocks at its core. The prospect, named "Fox", has a prospective resource potential of 200MMbo.
The Tugrug Basin has excellent evidence of a working petroleum system with thick, rich source rocks outcropping on the basin margins and live oil shows in the basin edge TSC1 core hole. The Jurassic and Cretaceous reservoir rocks interpreted to be the primary target at Fox are ideally located to receive a charge from the Tugrug source kitchen, so the primary risk on the prospect is the effectiveness of the trap. A well of 3,500 - 4,000 metres TVD would be required on the prospect and work is underway to determine the best location. With permits needed for the location, Fox could be an excellent candidate for drilling in a 2019 exploration campaign and it has recently attracted the attention of companies reviewing the farm out. A number of parties remain engaged in the farm out data room.
In Block IV, a review by the Company's technical team of the Wild Horse prospect mapping and volumetrics has increased the prospective resource potential to 490MMbo from the previous estimate of 290MMbo.
Technical team strengthened - appointment of two senior geoscientists
The Petro Matad team has been strengthened with the addition of two highly experienced industry veterans: John Boast, Seismic Interpreter and Jerry Smart, Geological Consultant each with over 35 years of experience in upstream oil and gas.
Mike Buck, the CEO of Petro Matad said: "The Petro Matad team is very pleased to have started mobilisation to drill the first well, Snow Leopard 1, in our western acreage. Good progress has also been made in identifying additional prospects.
I would like also to welcome John and Jerry to the Petro Matad team. They are both are very experienced professionals and have already made an impact on our knowledge and understanding of our asset base and potential prospectivity."