Petro Matad is set to begin production in Mongolia more than a decade after first discovering oil at the Block XX field.
Investors will be delighted to learn Petro Matad has received approval from the Ministry of Industry and Mineral Resources to reclassify oil production well pads, eliminating the need for construction permitting.
This has allowed the company to commence construction of long-term production facilities at Heron-1, with production expected to start in October. The company is finalising a cooperation agreement with the Block XIX operator for transport, processing, and export operations.
In addition, preparations are underway to test the Heron-2 well, with results expected in early November. The company aims to bring this well online in November if the test results are positive. The removal of construction permitting requirements has improved the chances of getting Heron-2 into production this year.
Today’s announcement contained a slight negative in terms of Gobi Bear exploration activities, which could have yielded a more upbeat outcome than the decision to suspend operations there for the time being.
The Gobi Bear-1 exploration well has been drilled and logged, showing potential hydrocarbon presence. However, due to ambiguous results, the well has been cased and suspended pending further evaluation and a likely well test to determine its production potential.
“The last few weeks have seen a lot of activity and some significant progress,” said Mike Buck, CEO of Petro Matad.
“We are extremely grateful to the recently appointed Ministers of Mining and Construction for their support in reclassifying oil production well pads to avoid the unnecessary burden of construction permitting regulations that were not designed for works of this kind. Our focus continues to be getting Heron-1 on stream as soon as possible and hopefully Heron-2 can also be brought onstream during the 2024 operational season.
“The Gobi Bear-1 result is a teaser but if oil is present in these well-developed reservoirs at such easily and cheaply drillable depth that could be a very significant result for the Company. As such, suspending the well allows us to gather data to refine our understanding and determine how best to get a definitive answer.”