Petro Matad postpones Mongolia drilling after government challenge

StockMarketWire.com - Oil explorer Petro Matad said it had postponed the drilling of a well in Mongolia after a provincial government challenged its land-use rights.

The first casing point of the Heron-1 well had been reached at 551 metres on schedule.

'However, the provincial government has challenged Petro Matad's legal right to use the land at Heron-1 on the basis that a tripartite agreement between two central government agencies and the province has not been executed,' the company said.

'In all of Petro Matad's operations the Company has followed the land permitting regulations as required under the production sharing contract and in accordance with instructions from the Ministry of Mining and the industry regulator MRPAM.'

'The absence of a tripartite land use agreement between government agencies has never previously been an issue.'

'We are working with the Ministry, MRPAM and the provincial government to remedy this situation as soon as possible.'

The rig at Heron-1 had been put on standby whilst the situation was resolved.

Daily standby costs were 'low by industry standards' and were of the order of $12,000.

Petro Matad said it had also started drilling another well in Mongolia.

The Red Deer-1 exploration well in the Asgat Sag Basin of Block XX in eastern Mongolia was being drilled with the Daton Petroleum Engineering and Oilfield Service LLC rig, DXZ1.

It was targeting a prospect with 48m barrels of mean prospective recoverable resource and would be drilled to a total depth of 2,100 metres.

Red Deer-1 was expected to take up to 35 days to complete.

In the event of a discovery, the company said it would bring in a separate rig for testing.


At 8:35am: [LON:MATD] Petro Matad Ltd share price was 0p at 7.9p

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Petro Matad to start drilling campaign in Mongolia

Oil exploration company Petro Matad announced Thursday the start of its 2019 Mongolian drilling campaign, Kallanish Energy reports.

The program begins with four wells located in Block XX onshore Mongolia, adjacent to the country's main oil-producing area, the Toson Uul Graben in the Tamtsag Basin. Drilling will commence in Q2 in selected areas of this block, with the exact schedule determined by the finalization of contracts.

The first well in the campaign will be Heron 1, part of the Heron Prospect, identified as the southerly extension of a proven oil basin drilled by PetroChina in Block XIX. The prospective recoverable oil is 25 million barrels in a trap area of 5 square miles.

Once Heron 1 well is completed, personnel and equipment will be moved to the Gazelle Prospect, where Petro Matad expects to recover 13 million barrels of crude. Red Deer Prospect will follow, with recoverable resources set at 48 million barrels of hydrocarbons.

Industry regulator Mineral Resources and Petroleum Authority of Mongolia (Mrpam) approved the proposal for a two rig-strategy, which allows successful operations to be immediately followed by appraisal drilling.

“I'm particularly pleased with the results of the northern Block XX seismic reprocessing, which has significantly improved the mapping and structural definition of the Heron and Gazelle prospects and has increased our resource estimate for Heron. As the first well in the program, Heron 1 is an appraisal of a discovery made in Block XIX, the probability of encountering hydrocarbons is good,” said CEO Mike Buck.

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Mongolia produces over 6 mln barrels of crude oil so far this year

Mongolia has extracted a total of 6.007 million barrels, or 814,506 tons, of crude oil from the beginning of this year to Dec. 12, data released by the Ministry of Mining and Heavy Industry showed Friday.

Out of its total production, 5.879 million barrels, or 798,485 tons, of crude oil were exported to China in the period mentioned above, the ministry said in a statement.

The mineral-rich Asian country plans to extract 8.1 million barrels, or 1.1 million tons, of crude oil this year, which would contribute 93.31 million U.S. dollars to the state budget.

The country has so far implemented 74.11 percent of its extraction plan and 72.54 percent of its export plan, according to the ministry.

Currently, there is no oil refinery in the landlocked country. The first one in the country is scheduled to be commissioned in late 2022.
Source: Xinhua

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Mongolia produces 5.12 mln barrels of crude oil so far this year

ULAN BATOR, Oct. 26 (Xinhua) -- Mongolia has extracted a total of 5.12 million barrels or 694,000 tons of crude oil from the beginning of the year to Oct. 19, data from the Ministry of Mining and Heavy Industry showed Friday.

Of these, 4.83 million barrels or 655,000 tons were exported to China, according to the data.

The mineral-rich Asian country plans to extract a total of 8.1 million barrels or 1.1 million tons of crude oil this year.

The country has so far implemented 63.19 percent of its extraction plan and 59.57 percent of its export plan.

Currently, there is no oil refinery in Mongolia. The first one in the country is expected to be commissioned in late 2022.

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Mongolia hikes gasoline, diesel prices amid tugrik depreciation

ULAN BATOR, Oct. 9 (Xinhua) -- Mongolian oil importers have hiked the retail prices of gasoline and diesel from Saturday amid a rapid depreciation of the country's national currency the tugrik against the U.S. dollar.

Main Mongolian oil importing companies, including Shunkhlai LLC and Magnai Trade LLC have raised their retail prices of gasoline and diesel by 50-250 Mongolian tugriks (0.02-0.10 U.S. dollars) per liter, local media reported on Tuesday citing the Mongolian Petroleum Consumer's Association.

Currently, the retail price for a liter of gasoline brands AI-92 and AI-95 in Mongolia is at 1,890 and 2,220 Mongolian tugriks (0.74 and 0.87 U.S. dollars), respectively. The diesel fuel in the country is at a cost of 2,250 Mongolian tugriks (0.88 U.S. dollars) per liter.

The importers have raised the retail prices of both gasoline and diesel for the third time so far this year.

The latest hike is directly related to the depreciation of the tugrik against the U.S. dollar, according to oil importing companies.

The U.S. dollar exchange rate against the tugrik has reached a historical high in the past few days, with the exchange rate standing at more than 2550.

According to governmental data, the East Asian country imported nearly 1.5 million tons of oil products last year.

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Mongolia produces over 3 mln barrels of crude oil in H1

ULAN BATOR, June 27 (Xinhua)-- Mongolian authorities said Wednesday that the country has in total extracted over 3.196 million barrels or 433,311 tons of crude oil in the first half of the year.

The Mongolian Ministry of Mining and Heavy Industry said that out of its total production, 3.127 million barrels or 424,631 tons of crude oil were exported to China during the same period.

Currently, Mongolia exports crude oil to China and imports petroleum products from Russia.

The country is planning to extract 8.1 million barrels or 1.1 million tons of crude oil this year, which would contribute 223.4 billion Mongolian Tugrik (93.31 million U.S. dollars) to the state budget.

According to the ministry, Mongolia has implemented 38.6 percent of its export goals for the year.

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Shell leaves Petro Matad on its own in Mongolia

Petro Matad revealed it had lost its partner in the Block IV and V production sharing contracts in west and central Mongolia on Friday.

The AIM-traded company said that, on 28 April,Shell - through its affiliate company - issued an exit notice to Petro Matad’s 100% owned subsidiary Central Asian Petroleum Corporation, exercising its option to leave the farmout agreement dated 7 April 2015.

“The decision by Shell is based on optimisation of its own portfolio and it is not related to the technical prospects for the blocks,” Petro Matad’s board said in a statement.

“The exit is subject to Mongolian government consent.”

As required in the agreements, Shell’s affiliate company will compensate Central Asian Petroleum Corporation as a result of the exit decision.

Petro Matad said the amount will be “highly material” to the company. Its working interest in the two production sharing contracts will revert to 100% from the current 22%.

“Petro Matad will continue to execute the work program as planned,” the board confirmed.

“Currently, our seismic contractor is mobilising to the field and will soon commence the second phase of the planned seismic acquisition programmes in Blocks IV and V.”

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