Petro Matad Limited Release of Rig Tender and Company Update (3032V)
27 January 2017 - 7:20PM
UK Regulatory
TIDMMATD
RNS Number : 3032V
Petro Matad Limited
27 January 2017
27 January 2017
Petro Matad Limited
("Petro Matad" or the "Company")
Release of Rig Tender and Company Update
In preparation for its drilling programme in Blocks IV and V,
which is expected to commence in mid-2017, the Company announces
that it has today issued a tender for a drilling rig and related
services. In 2016, the Company pre-qualified potential new bidders
and in combination with a bidder that has previously drilled wells
for Petro Matad, four companies have been issued the tender. Based
on pre-qualification results, drilling operational facility visits
and rig inspections of the pre-qualified drilling contractors which
were undertaken in Mongolia and abroad, the Company believes that
any of these potential bidders will be able to undertake the
drilling programme.
Bids are due to be received in late February following which an
evaluation of the bids will be undertaken by the Company. Contract
award, after completion of negotiation of contract terms with the
successful bidder, is expected to occur in late March or early
April. Rig mobilization will commence shortly thereafter.
Further details of the drilling campaign and identification of
the successful bidder will be disclosed in future
announcements.
Cash Balance and Shell Payment
Following receipt of the initial $10 million payment from Shell
in 2016 and settlement of outstanding invoices for seismic
acquisition, etc., the Company's current cash balance is $6
million. As noted in previous announcements an additional $5
million will be paid by Shell as part of their Block IV and V exit
obligations and these funds are expected to be received early next
week. Upon receipt, the Company's cash balance will be circa $11
million, which will be sufficient to undertake a drilling programme
this year as planned, even in the absence of securing a
farmout.
Farmout
The farmout process continues. The Company can report that there
has been considerable interest shown by potential farmee's in all
the Company's blocks (IV, V and XX). To-date, a significant number
of companies have signed confidentiality agreements and have gained
access to our virtual dataroom (VDR). The VDR is a convenient
mechanism for companies to initially review data on-line and decide
if they want to move to the next stage, which would be to visit the
Company's physical dataroom. Most companies that visited the VDR
have requested access to the physical dataroom and this process is
ongoing.
PSC (Production Sharing Contract) Extensions
The initial eight-year terms for Blocks IV and V expire on 29
July 2017. The PSCs provide for two times two-year extensions on
the same terms. PSC extension discussions with the regulatory body
(MRPAM) have commenced and no issues are expected. The Company
expects that the extensions will be granted well in advance of the
commencement of the drilling programme.
Further updates will be made in due course.
Enquiries:
Petro Matad Limited
Ridvan Karpuz, CEO +97 670 141 099 / +97 675 751 099
NOMAD and Broker
Stockdale Securities Limited
Richard Johnson / David Coaten +44 (0)20 7601 6100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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