The company will target 194MMbo of hydrocarbons estimated to be contained in the onshore block
Petro Matad said that the Mongolian Minister of Mining and Heavy Industry has approved the award of an exploitation licence to onshore Block XX located in the eastern part of the country.
According to the Mongolian oil company, the awarded block spans 281km2 and is contained in the producing Toson Uul Basin. The block holds the Heron 1 discovery, which was made in 2019.
As per the Mongolian Petroleum Law and the Block XX production sharing contract, the exploitation licence will be valid for 25 years up to 1 July 2046. The exploitation licence has the option to be extended for two periods of five years each.
Petro Matad aims to initially develop the proven resources surrounding the Heron 1 well. As per the full field development plan, the company will target the 194 million barrels (MMbo) of potential resources estimated to be in place in the Heron structure.
The Mongolian oil company will stimulate and complete the Heron 1 well and all subsequent appraisal and development wells to facilitate their early production. Petro Matad plans to use spare ullage in the nearby processing and export facilities operated by PetroChina.
According to the company, the Heron 1 well will use central processing facilities in PetroChina-operated Block XIX, located about 17km in the north direction. Last year, the company signed a memorandum of understanding with PetroChina to get access to the processing facilities.
Petro Matad said that it will negotiate the commercial details for the sharing of PetroChina’s facilities.
The Mongolian company will also resume talks with potential farm-in partners for determining if any appropriate partnership can be forged to execute the next stage of activity.
Petro Matad CEO Mike Buck said: “Securing the Block XX Exploitation Licence has been a lengthy process but Petro Matad very much appreciates the patient and professional way in which the government has dealt with the matter.
“We are delighted and honoured to have been awarded what is only the third such licence ever granted in Mongolia.
“The pandemic has been difficult for Petro Matad as it has for everybody and although the Company still has some important preparations to complete, we are looking forward to an extremely active 2022 with the primary goal of generating revenue from early production at Heron as soon as possible.”
Apart from Block XX, Petro Matad has a production sharing contract in place for Block V, which is located in central western Mongolia.