Petro Matad finds oil in first Davsan Tolgoi exploration well in Eastern Mongolia
Petro Matad (LON:MATD) has encountered oil shows through the drilling of the Davsan Tolgoi-1 (DT-1) exploration well which is expected to reach total depth within the next week to ten days. The well is the first to be drilled as part of the 2010 drilling programme on Block XX in Eastern Mongolia.
Investors were pleased with the news, sending shares up more than 13 percent in early afternoon deals.
The company said that good to fair hydrocarbon shows were encountered, near the top of the Lower Zuunbayan Formation, in an 8 meter-thick sandstone zone. Drilling has temporarily paused at 1,093m for a bit change and it will subsequently continue to a depth of 1,440m. The company noted that no testing is scheduled at the current horizon.
"These shows are encouraging because the Lower Zuunbayan and Upper Tsagaantsav formations are considered secondary objectives for this well,” Petro Matad chief executive Douglas McGay said. “The well is currently 22m high to the 3D seismic prognosis toward the deeper Lower Tsagaantsav Formation that remains the company's primary objective for DT-1.
“We believe the occurrence of hydrocarbons above the primary objective is both encouraging and significant.”
Petro Matad is the parent company of a group focused on oil exploration, as well as future development and production in Mongolia. The group holds the sole operatorship of three PSCs with the government of Mongolia. The principal asset is the PSC for Block XX, a petroleum block of 14,250km² in the far eastern part of the country. The two other blocks, IV and V are located in central Mongolia and jointly cover 73,498km².
Investors were pleased with the news, sending shares up more than 13 percent in early afternoon deals.
The company said that good to fair hydrocarbon shows were encountered, near the top of the Lower Zuunbayan Formation, in an 8 meter-thick sandstone zone. Drilling has temporarily paused at 1,093m for a bit change and it will subsequently continue to a depth of 1,440m. The company noted that no testing is scheduled at the current horizon.
"These shows are encouraging because the Lower Zuunbayan and Upper Tsagaantsav formations are considered secondary objectives for this well,” Petro Matad chief executive Douglas McGay said. “The well is currently 22m high to the 3D seismic prognosis toward the deeper Lower Tsagaantsav Formation that remains the company's primary objective for DT-1.
“We believe the occurrence of hydrocarbons above the primary objective is both encouraging and significant.”
Petro Matad is the parent company of a group focused on oil exploration, as well as future development and production in Mongolia. The group holds the sole operatorship of three PSCs with the government of Mongolia. The principal asset is the PSC for Block XX, a petroleum block of 14,250km² in the far eastern part of the country. The two other blocks, IV and V are located in central Mongolia and jointly cover 73,498km².
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