REG - Petro Matad Ltd - Operational Update

Petro MatadAnnouncement

22/08/2024 07:01

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RNS Number : 3165B  Petro Matad Limited  22 August 2024

22 August 2024

Petro Matad Limited

("Petro Matad" or the "Company")

Operational Update

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

Highlights

·    The Heron-1 oil discovery well has been re-entered, stimulated and
completed for production in a trouble free operation.

·   Neighbouring operator PetroChina has provided oil storage tanks that
will complete the surface configuration for the production well site
facilities.

·    DQE Drilling has been approved as the winning tenderer for the 2024
drilling programme and the rig to drill Heron-2 is expected to start
mobilisation by the end of August with spud anticipated in mid-September. The
smaller rig for Gobi Bear-1 well is expected to mobilise by mid-September and
spud before month's end.

Heron-1 reservoir stimulation and down-hole completion

Work on the Heron-1 discovery well has been completed with the down-hole pump
installed ready for production following a successful reservoir stimulation
programme. The well was found to be in good condition and the perforated zone
from 2834m to 2846m in the Lower Tsagaanstav Formation from which the well
flowed at 821 bopd on test was successfully isolated and hydraulically
stimulated. Pressure responses observed during the stimulation were consistent
with a successful operation and oil was observed during the subsequent
recovery of the stimulation fluid. All completion equipment has been
demobilised and the well site prepared for the installation of production
facilities.

Surface equipment installation and preparations for production

Already purchased production facilities are ready to be installed and
neighbouring operator PetroChina has provided spare oil storage tanks at
nominal cost which are now being integrity tested and which will complete the
production site configuration. It is planned to install and commission the
surface facilities during the current operational window and the approval
process for the construction permit required for installation of the
facilities is at an advanced stage.

Discussions with PetroChina and industry regulator, the Mineral Resources and
Petroleum Authority of Mongolia (MRPAM), on processing, transport and sales of
Block XX production are continuing. The sharing of facilities is covered under
an MoU signed with PetroChina in 2021 and is fully supported by MRPAM.

Preparations for the 2024 drilling programme

The contract for the drilling of two wells in the Block XX Exploitation
License area has been agreed with PetroChina's drilling subsidiary DQE
Drilling and approved by MRPAM. Mobilisation of the rig to drill the Heron-2
well is planned to begin before the end of August with well spud expected by
mid-September. Heron-2 will be drilled to a total depth of c.2,900m and the
anticipated timing will allow for a full evaluation of the well results, flow
testing and completion within the current operational window.

A smaller rig for the high impact, low cost Gobi Bear-1 exploration well is
expected to mobilise to site in the first half of September and to spud before
month's end. The planned total depth of 1,800m should be reached in good time
to allow for logging and, if merited, testing before the normal winter
operational shutdown in late November.

Mike Buck, CEO of Petro Matad, said:

"With the Heron-1 down-hole completion now ready for production startup, the
well site has been prepared for the installation of the surface production
facilities. We are pleased to have concluded our negotiations with DQE and
look forward to continuing to work with them on the 2024 drilling programme.
 

The team is now working at pace to spud Heron-2 in mid-September and to secure
the required construction permits for Heron-1."

Further updates will be provided as the 2024 work programme progresses.

 

- Ends -

Further information please contact:

 Petro Matad Limited
 Mike Buck, CEO                                 +976 7014 1099 / +976 7575 1099

 Shore Capital (Nominated Adviser and Broker)
 Toby Gibbs                                     +44 (0) 20 7408 4090

 Rachel Goldstein

 Zeus (Joint Broker)

 Simon Johnson                                  +44 (0) 20 3829 5000

 Louisa Waddell

 FTI Consulting (Communications Advisory Firm)
 Ben Brewerton                                  +44 (0) 20 3727 1000

 Christopher Laing

 Catrin Trudgill

 

Technical information in this news release has been reviewed by the Company's
Technical Manager, Mr. Jerry Smart. He has over 40 years of industry
experience in oil and gas exploration and production with LASMO, Eni,
Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's
College, London.

 

About Petro Matad

Petro Matad is the parent company of a group focused on oil exploration, as
well as future development and production in Mongolia. Currently, Petro Matad
holds 100% working interest and the operatorship of the Matad Block XX
Production Sharing Contract with the government of Mongolia. Block XX has an
area of 214 square kilometres in the far eastern 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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