Petro Matad Limited Operational Update
29 October 2015
Operational Update
Further to the Company's announcements on 7 August 2015, regarding the contract award for airborne full tensor gradiometry data acquisition and processing services (FTG) combined with high resolution aeromagnetics (HRAM); and 13 August 2015, regarding the contract award for 2D Seismic data acquisition; both in Blocks IV and V, Central Mongolia, the Company is pleased to provide an operational update on current and planned activities.
The combined FTG and HRAM survey contracted to Bell Geospace has been successfully completed within budget and ahead of plan. The Company acquired 22,000 line km of data over an area of 11,000 km2. The data quality, as vetted by third party analysts, is excellent and allows the Company to optimise the ongoing seismic acquisition program. Furthermore it will significantly enhance the Company's ability to high grade basins and de-risk prospects for drilling. The next steps will be to further process the data and to integrate it with existing and new seismic data. Combined interpretation of FTG and seismic has been successfully used in frontier exploration elsewhere but it is the first time in Mongolia that an FTG survey has been undertaken for hydrocarbon exploration.
The 2D seismic acquisition survey is well underway and the data quality to-date is very good. The programme is designed to acquire approximately 2,000 line km of new data which will be integrated with existing data and the newly acquired FTG data. The seismic acquisition campaign is currently expected to continue well into the first quarter of 2016 with contingency to acquire additional infill lines. The Company, the regulator and the seismic contractor are confident that acquisition can continue during the winter months. All necessary precautions will be undertaken to ensure health, safety, security and environmental (HSSE) standards for winter operations are strictly maintained.
The Company is committed to an exploration drilling programme in 2016. Prospect generation arising from interpretation of the aforementioned new data and existing data is expected to be completed by the end of March 2016. Preparation of invitation to tender documents for a drilling rig is at an advanced stage. Pre-qualification documents will be issued to potential bidders shortly and by year-end the Company expects to release the full tender package for an exploration rig capable of drilling to approximately 3,500 metres. Contract award for a rig is targeted for early Q2/2016 with drilling expected to commence in August 2016. The planned well will be the first wildcat to be drilled in Central Mongolia.
Further announcements will be made as major milestones are achieved.
Commenting, Enkhmaa Davaanyam, Petro Matad Chairperson, said:
"I am very pleased with the operational progress being achieved and the data quality observed to date in the Company's FTG and seismic acquisition programmes. I am very confident that once the Petro Matad team has integrated the new data with the existing database a number of exciting drillable prospects will emerge, with exploration drilling on the best commencing during the third quarter of 2016.
