London-listed Mongolian oil firm Petro Matad Limited is poised to commence production at its Heron-1 well in eastern Mongolia’s Block XX by October 25, according to a statement released on Tuesday.
The company is now set to start generating revenue more than a decade after oil was first discovered in Petro Matad’s Block XX field.
Petro Matad has completed all construction and equipment installation at the well pad, with final commissioning of essential infrastructure currently underway.
Senior government officials, including representatives from the Ministry of Industry and Mineral Resources, will attend a production startup ceremony at the site to usher in the start of production.
A crucial cooperation agreement with PetroChina Daqing Tamsag is nearing completion, though it is awaiting final approval from PetroChina’s headquarters. The agreement covers vital operational aspects, including the processing, export, and sale of Block XX production through PetroChina’s facilities, located 20 kilometers north in Block XIX.
Despite pending administrative details, notably the administration fee to be paid to PetroChina, all parties have agreed to commence production operations before the winter shutdown in late November. This timing is critical as production and processing activities will continue through the winter months, making the October startup essential for operational continuity.
“We have waited a long time to get the Heron-1 well into production and we are pleased to have reached this important milestone. We very much appreciate the support of the Ministry and MRPAM and the cooperation that PetroChina is providing,” said Mike Buck, CEO of Petro Matad.
“We are also very grateful for the hard work and enthusiasm of our dedicated team and for the patience and continued support of our shareholders.”
Petro Matad shares were 5% higher at the time of writing.