Petro Matad, the AIM quoted Mongolian oil explorer announces that further to the press release on 31 May 2017, a comprehensive drilling contract has now been signed with SINOPEC INTERNATIONAL PETROLEUM SERVICE MONGOLIA CO. LTD ("Sinopec") and that the initial drilling targets have been selected.

2017 exploration drilling programme

The first exploration well will be located on the Irves (Snow Leopard) prospect in the Taats Basin of Block V and will spud in September 2017. The well will be drilled to a total depth of 3150 m and have an expected duration of 50 days. The Irves prospect comprises a series of tilted fault blocks, with multiple stacked reservoir targets, and has an estimated potential of 160 million barrels of oil-in-place (mean-case) and an upside of 350 million barrels of oil-in-place.

Irves-1 is an important 'basin and play opening' well. It will be the first deep exploration well drilled in Central Mongolia to test the hydrocarbon potential of the highly prolific Early Cretaceous 'syn-rift' play already proven in neighbouring Chinese and eastern Mongolian basins. Success at Irves-1 would open the Taats Basin for further exploration and potentially access over 1.8 billion barrels oil-in-place (mid-case estimate).

Once the Irves-1 well has been completed, the rig will mobilise to the second well location, which is the Takhi (Wild Horse) prospect within the Baatsagaan Basin of Block IV. Takhi-1 will be a shallower exploration well, with a total depth of 1850m and an expected duration of approximately 20 days. The Takhi prospect comprises a large faulted anticline with several stacked reservoir objectives. The well is designed to target 280 million barrels of oil-in-place (mean-case), and has an upside case exceeding 650 million barrels of oil-in-place. Success at Takhi-1 would likewise, open the Baatsagaan Basin for further exploration and potentially access over 1.2 billion barrels oil-in-place (mid-case estimate).

For both the Irves and Takhi prospects there is significant stratigraphic upside potential, which is not included in the prospect volumes stated above. More details on the drilling targets will be provided nearer the commencement of drilling operations.

The Taats and Baatsagaan basins are just 2 basins out of a total of 12 basins that the Company has identified within Blocks IV and V. Petro Matad has so far mapped over 65 structural prospects and leads across these basins and based on these alone the 12 basins have the potential to contain over 20 billion barrels of oil in place. These basins may also offer significant upside potential from stratigraphic traps and unconventional oil plays. All volumes are the Company's internal estimates.

Further announcements will be made on progress leading up to the spud of the first well.

Ridvan Karpuz, the CEO of Petro Matad, said:

"I am very pleased to have executed the rig contract which is a significant milestone as we head toward exploratory drilling later in 2017. With the signature of the agreement with Sinopec, the Company is now poised to deliver on its commitment to undertake a high impact exploration drilling programme in 2017."

Published Date:2017-07-05