REG - Petro Matad Ltd - Operational Update

Petro MatadAnnouncement

25/02/2022 07:00

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RNS Number : 7558C  Petro Matad Limited  25 February 2022

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INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.

 

25 February 2022

Petro Matad Limited

('Petro Matad' or the 'Company')

Operational Update

LONDON, 25 February 2022: Petro Matad Limited ("Petro Matad" or "the
Company"), the AIM quoted Mongolian oil company, provides the following
operational update.

Block XX Exploitation Area

The Company has advanced negotiations with operational service providers for
the 2022 work programme and has secured some price reductions compared to the
2019 drilling programme. Contracts are being prepared in advance of
discussions at the annual budget meetings with the industry regulator, the
Mineral Resources and Petroleum Authority of Mongolia (MRPAM). Petro Matad is
pushing for operational activity to start after the winter hiatus in Q2 with
the re-entry, stimulation, and completion for production of Heron 1. The
equipment and personnel required for this work are largely already in
Mongolia.

Currently the timing of the availability of drilling equipment and crews for
the drilling of additional Heron wells has not been confirmed by the
contractors. The most active Chinese drilling contractor along with the other,
mainly Chinese, service providers have been impacted by Covid-related travel
restrictions. These are due mainly to the restrictions imposed by China, which
has maintained tight control on movement within and across its borders in
response to the Omicron variant of the virus. Meanwhile, Mongolia has recently
re-opened its borders to all vaccinated travellers in order to reinvigorate
the business and investment environment.

Petro Matad continues to push the service providers to confirm the timeframe
for its work programme in the 2022 drilling season.

At the same time, efforts are continuing apace to get the government to remedy
the legal contradictions related to land access and usage issues that have
previously impacted the work of Petro Matad and other operators in Mongolia.
We are advised that proposed legal changes confirming land use rights,
including input Petro Matad has provided, are working their way through the
approvals processes within the central government.

At the local level, provincial and district authorities have been unwilling to
discuss local land access applications pending direction from the central
government. Petro Matad is working at both central and local levels and
recently made a presentation to the local authorities that administer the
entirety of the Block XX Exploitation Area. The presentation was well
received, which is a positive step forward in securing the permits required.
We continue to push at the central, provincial, and district levels to secure
the permits required for the next phase of our activities.

Technical and operational cooperation, Block XX

DQE International, the major provider of drilling and other operational
services in Mongolia, has made a proposal to Petro Matad for a technical and
operational cooperation agreement whereby DQE International will provide a
suite of services which could include expert geo-technical input, drilling,
stimulation and completion services, production operations and oil export for
Block XX operations. DQE International supplies these services to its parent
company PetroChina, Mongolia's major oil producer, and has more than 15 years
of expertise working in the Tamsag Basin. DQE International's suggested
cooperation includes the possibility of payment from production revenue,
partial payment in oil, and some risk sharing. This is an intriguing proposal
from Mongolia's most experienced service provider, and the parties have set up
a working group to determine urgently how such a cooperation could work and to
try and reach a conclusion early in Q2 so that the 2022 drilling season is
available for the implementation of any agreement reached.

In parallel, Petro Matad is still progressing discussions with potential
farminees but the Company is funded for and plans to implement its operational
programme in 2022 with or without a farm in deal.

Block V Exploration PSC

The environmental impact assessment to allow Petro Matad to operate in Block V
in 2022 and beyond was completed, submitted and has been approved by the
Ministry of Environment. The Company is now working with the local authorities
to try to secure land access and usage permits for the high graded Raptor
trend. We are also investigating cost effective drilling solutions for the
relatively shallow, very high impact prospectivity identified in the area.

Annual General Meeting

Petro Matad will be holding its Annual General Meeting at 8.00 a.m. local time
(4.00 p.m. ULAT/SST) on 3 March 2022 at FTI Consulting, 200 Aldersgate,
Aldersgate Street, London EC1A 4HD with a satellite meeting held at Blue Sky
Tower, Sukhbaatar District, Ulaanbaatar, Mongolia.

The Company will be providing dial-in audio for the Annual General Meeting and
the details will be provided via RNS nearer the date of the Annual General
Meeting.

Further operational updates will be provided in due course.

- Ends -

Further information please contact:

 Petro Matad Limited
 Mike Buck, CEO                                                              +976 7014 1099 / +976 7575 1099
 Shore Capital (Nominated Adviser and Joint Broker)
 Toby Gibbs                                                                  +44 (0) 20 7408 4090

 John More
 Arden Partners (Joint Broker)

 Paul Shackleton                                                             +44 (0) 20 7614 5900
 FTI Consulting (Communications Advisory Firm)
 Ben Brewerton                                                               +44 (0) 20 3727 1000

 Christopher Laing

 

 

About Petro Matad

Petro Matad is the parent company of a group focussed on oil exploration, as
well as future development and production in Mongolia. At the current time,
Petro Matad holds 100% working interest and the operatorship of two Production
Sharing Contracts with the Government of Mongolia. Block XX has an area of 218
square kilometres in the far eastern part of the country and Block V has an
area of 7,937 square kilometres in the central western part of the country.

Petro Matad Limited is incorporated in the Isle of Man under company number
1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle
of Man, IM1 1EQ.

 

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