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Petro Matad Limited (LSE:MATD), an AIM-quoted oil exploration and development company focused on Mongolia, has provided an operational update highlighting significant progress on its key projects, including the Heron-1 oil discovery and preparations for the 2024 drilling programme.
Heron-1 Oil Discovery Well Completed for Production
The company has successfully re-entered, stimulated, and completed the Heron-1 oil discovery well, a critical step towards initiating production. The operation was executed without complications, and the well was confirmed to be in good condition. The reservoir stimulation program targeted the perforated zone between 2834m and 2846m in the Lower Tsagaanstav Formation, from which the well had previously tested at a flow rate of 821 barrels of oil per day (bopd). Following stimulation, pressure responses indicated a successful operation, with oil observed during the recovery of the stimulation fluid. The installation of a down-hole pump has been completed, and the site is now prepared for the installation of surface production facilities.
Surface Equipment and Production Preparations
To facilitate the production phase, Petro Matad has procured the necessary production facilities, which are ready for installation. PetroChina, a neighboring operator, has provided oil storage tanks at a nominal cost, further supporting the completion of the production site configuration. These tanks are currently undergoing integrity testing. The company plans to install and commission the surface facilities during the current operational window, with the construction permit approval process already at an advanced stage.
Discussions with PetroChina and the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) regarding the processing, transport, and sale of oil from Block XX are ongoing. The sharing of facilities is covered under a Memorandum of Understanding (MoU) signed with PetroChina in 2021, which is fully endorsed by MRPAM.
2024 Drilling Programme Underway
Preparations for the 2024 drilling programme are well underway, with PetroChina’s drilling subsidiary, DQE Drilling, being awarded the contract for the two-well drilling campaign in the Block XX Exploitation License area. Mobilization of the rig for Heron-2, the first of these wells, is scheduled to begin before the end of August, with spudding expected by mid-September. The Heron-2 well is planned to reach a total depth of approximately 2,900 meters, with full evaluation, flow testing, and completion anticipated within the current operational timeframe.
Additionally, a smaller rig is set to mobilize for the Gobi Bear-1 exploration well in the first half of September, with spudding expected before the end of the month. This high-impact, low-cost exploration well is planned to reach a total depth of 1,800 meters, with sufficient time allotted for logging and potential testing before the winter operational shutdown in late November.
