Petro Matad gave an update on its operations, results of the interpretation of the 220 kilometers of seismic acquired over Blocks IV and V, located in central Mongolia, and the continuing farm-out process. Block IV covers approximately 29,000 square kilometers and Block V approximately 21,150 square kilometers.
”In Block IV, 65 kilometers of seismic were shot over a thrusted anticlinal feature seen on a single east – west seismic line in the western part of the block. The new seismic confirms a three way dip closure on the downthrown side of major strike slip fault with possible recoverable reserves of 60 to 100 million barrels of oil. A smaller, but a well imaged, more robust four way dip closure with possible reserves of about six million barrels can also be mapped within this overall fault prospect,” said Petro in an announcement.
“In Block V, 155 kilometers of seismic were shot over a large faulted anticlinal area mapped on existing seismic. Unfortunately, the new seismic indicates that the section continues to rise towards the northeast boundary fault that forms the basin margin. There is a closure against this basin margin but the relatively shallow depth of this closure makes it relatively high risk.”
Petro said that there are no oil exploration wells and only limited seismic coverage in Central – Western Mongolia so these are the first drillable prospects identified in this area. Both can be considered as locations for possible basin opener wells that will advance significantly knowledge of and confidence in the hydrocarbon potential of the area.
“We are confident that there are many other similar basin areas and prospects within the company’s acreage. Unfortunately, the existing seismic coverage over most of Blocks IV and V and the southern half of Block XX is limited and hence insufficient to confirm this expectation. We are therefore looking at other technical alternatives to high grade our acreage. One such technique is airborne full tensor gravity gradiometry (FTG) which has been used successfully in other onshore areas such as Africa.”
The combined FTG and high resolution aeromagnetic survey will produce a preliminary map of the subsurface structures, basement architecture and sediment thickness in the frontier areas of Blocks IV, V and XX where there is currently little or no seismic. “As this is an airborne survey it is able to cover a much larger area faster and more cheaply than conventional seismic. The results of the FTG survey can then be used to guide the structural interpretation where there is limited seismic coverage and target where best to acquire follow-on seismic data for prospect definition.”
Petro Matad said that it continues to look for partners in the project but has signed no agreements as of yet, although several high level of interest has been expressed.
With this in mind, the directors of Petro Matad have agreed to a number of measures to preserve cash resources and maximize the funds available for operational activities, the company said. In particular, the non-executive directors have agreed unanimously that for the next six months they will forgo their usual director fees, and in lieu of a cash fee, will receive conditional share awards. In addition, the executive directors and certain employees, at their own volition, have also opted to trade a portion of their salary to participate in the same conditional share award program. The European Bank for Reconstruction and Development (EBRD) Representative Director, Mary Ellen Collins, will be forgoing fees even though no conditional share awards are being issued to her or the EBRD.
Petro’s cash position at March 31, 2014 was 2.35 million USD which, which the company reports is more than sufficient to maintain the company as a going concern.
Petro Matad said that its board has also implemented a number of structural changes to the operational structure of the company, with resources being focused on a core team to support the technical studies associated with the farm-out effort, maintain relations with government and maintain the financial and administrative governance of the company.
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