Petro Matad (PRTDF)

[douginil]

Report on interview with Mike Buck, CEO of Petro Matad

July 5, 2019

Thanks to Malcy's Blog

I was very fortunate to catch up with Mike Buck, CEO of Petro Matad earlier this week before he is off to Mongolia for another exciting drilling campaign. MATD is the leading explorer in Mongolia where Petrochina operates 95% of production, much of which is in decline. Interestingly, at present all crude is trucked to China and all refined product demand is imported from Russia…But, Mongolia is building its own refinery using a soft loan from India which is scheduled for start-up in October 2021 although that may be optimistic. So, with Petro Matad being the only real ‘local’ player opportunities are good and relationships with the Government are improving all the time.

It is fair to say that the 2019 exploration programme is concentrating on Block XX but Blocks IV and V haven’t been forgotten, indeed these two blocks are expected to have their exploration licences extended imminently. The key well, the Heron well is expected to be spudded around mid July, carries a 75% COS and should be producing results in the second half of August. MATD has an agreement with Petrochina for use of a local testing unit which could be on site within a couple of weeks or so if needed.

After the Heron well the rig moves to the smaller, Gazelle prospect probably in early September with its results probably at the end of that month. Meanwhile, using another rig, the plan is to spud the well on the Red Deer prospect in the Asgat Basin at the end of July. A number of people ask about blocks IV and V and why it is possible that the exciting Velociraptor well in the Raptor trend in Block V may not be drilled this year. As indicated above these blocks are likely to have received their extensions by then whilst the exploration licence on Block XX expires next June and the company has to ensure that it has an exploitation licence in place come July 2020. If that means spending its money ensuring that it can be held by production effectively then it will be well worth it.

If successful at Heron, one can expect a long term production test which apart from hopefully keeping the licence will start to bring valuable cash into the company. Oil will likely be trucked the 25 km to the Tolson Uul CPF in unison with Petrochina with whom pretty good relations are being kept. This will probably mean that there won’t be lengthy and expensive unitisation discussions and that cash flow can be used for further drilling.

Petro Matad is in an interesting place right now, disappointment over last season’s drilling campaign are behind it and it has every chance of being a producer in-country this summer. It is fully funded for this programme which has appraisal at Heron 1, high potential at Gazelle 1 and a higher risk but sizeable structure at Red Deer 1. It is clear and sensible that Block XX gets priority in the event of success for the reasons shown above and shareholders have every right to be optimistic about this summer’s programme.





https://www.malcysblog.com/2019/07/oil-price-eco-atlantic-gulf-keystone-igas-petro-matad-and-finally/