TIDMMATD
RNS Number : 6037Q
Petro Matad Limited
01 March 2021
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
PETRO MATAD LIMITED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED
UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION
SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN
THE PUBLIC DOMAIN.
1 March 2021
Petro Matad Limited
('Petro Matad' or the 'Company')
Block XX Operational Update
Petro Matad Limited, the AIM quoted Mongolian oil company,
provides the following operational update.
Covid-19 situation in Mongolia
Mongolia had effectively contained the COVID-19 virus in country
until November 2020. Since then the number of cases in the
community led to the imposition of tight restrictions and to date
there have been three lockdowns. The total number of cases in
Mongolia is approaching 3,000 and since the start of the year
Ulaanbaatar has been on a high alert level with business operations
restricted and government agencies working on a rotational basis. A
full lockdown was established for 12 days over the Lunar New Year
holiday period ending on 23 February. During the lockdown the
government carried out mass testing of the population with 500,000
people in the city of 1.5 million tested. A vaccination programme
has now begun with the goal to complete vaccination of 60% of the
country's population by the third quarter of 2021. The government
has introduced a $3.5 billion comprehensive plan to protect the
health of its people and to revive the economy. The official
Covid-19 risk level in Ulaanbaatar was reduced on 23 February and
95% of businesses were permitted to re-open. As part of the plans
for the economic revival, the government has said it does not
intend to impose any more widespread lockdowns unless the spread of
the virus spikes unexpectedly.
The restrictions and lockdowns since November 2020 have had an
impact on Petro Matad's Block XX Exploitation Licence application
process with government offices being shut. However, ministry and
regulator employees have been working remotely and the Company has
worked collaboratively with government to ensure that progress has
been made during this period. With the lifting of restrictions on
23 February, Petro Matad is hoping to pick up the pace in the
process to secure the Block XX Exploitation Licence.
Block XX Exploitation Licence
Reserves: Following the late December meeting of the Mineral
Resource Professional Council (MRPC) its formal approval of the
Heron Field reserves has been received.
Plan of Development: The expert auditor committee of the
Ministry of Mining and Heavy Industry (MMHI) was constituted in
January 2021 and has now completed its review of the Plan of
Development. The recommendations made are being incorporated into
the plan in advance of its submission to MRPC. In parallel,
industry regulator the Mineral Resources and Petroleum Authority of
Mongolia (MRPAM) agreed to do its own required and independent
review of the Plan of Development simultaneous with the MMHI
auditors' review. MRPAM has advised that its review is complete and
we are waiting to be called to a meeting of the MRPAM Technical
Committee to receive its recommendations. Petro Matad is ready for
the meeting and has asked MRPAM to convene the Technical Committee
as soon as possible. Once the discussions with MRPAM are complete
the MRPC will be asked to convene to review and approve the Plan of
Development.
Exploitation Area: The Company has submitted its formal
application to MRPAM for the Exploitation Area and we are urging
MRPAM to add discussion and agreement of the Exploitation Area to
the agenda of the Technical Committee meeting that will review and
conclude on the Plan of Development. Under the law, the
Exploitation Area is to be determined by mutual agreement between
MRPAM and the Company.
Formal application for Exploitation Licence: The MRPC approval
and ministerial sign off on the Plan of Development and MRPAM's
agreement to the Exploitation Area are the final two steps in the
Mongolian government's Exploitation Licence application process. As
soon as we have the outstanding documentation in hand it will be
submitted to the Minister of Mining and Heavy Industry along with
the approval of the reserves and the already approved Detailed
Environmental Impact Assessment for the Heron Field development and
we will formally request the Minister to grant the Block XX
Exploitation Licence.
Timing: With the Lunar New Year lockdown now over, we are
looking to complete all the necessary steps and to submit our
application for the Exploitation Licence to the Minister by the end
of Q1. The Company will endeavor for this to be submitted as soon
as possible but given the slow progress we have seen in the process
to date, this is an aggressive target and slippage into Q2 may
occur, although it will not be for want of trying on the Company's
part.
Memorandum of Understanding (MOU) with Petro China: As part of
the Plan of Development preparations Petro Matad and Petro China
discussed the technical and commercial aspects of unitisation of
the Heron Field which straddles the boundary of Block XIX and Block
XX. The companies agreed that unitisation and joint development are
not merited due to the nature of the deposit and its relatively
small extension into Block XIX. This conclusion has been
incorporated into the Heron Plan of Development and will be
discussed further with MRPAM at the appropriate time. The MOU also
includes the agreement that Petro Matad and Petro China will
discuss, agree and formalise how Petro Matad will access Petro
China's Block XIX infrastructure to exploit economies of scale and
operating efficiencies.
Online forum speculation
There has been speculation that the slow progress on the
Exploitation Licence may be due to local antipathy towards Petro
Matad or Petrovis LLC, the Company's largest and founding
shareholder. We have seen no evidence of this and indeed, although
the progress has been disappointingly slow, all of the approvals we
have sought so far have been granted by the relevant government
agencies. We have no reason to suspect that this will change as we
seek the approvals that are still required.
The speculation specifically referenced a legal case in Mongolia
against Mr. Ch. Davaanyam, a director of Petrovis and father of
Petro Matad's Chairperson. Whilst Mr. Davaanyam has a small
personal shareholding in Petro Matad, he has never had direct
involvement in the Company and the Company has seen no impact on
its activities resulting from the legal case involving Mr.
Davaanyam.
The process by which an Exploitation Licence application must be
made is not set out in detail in the Petroleum Law and Production
Sharing Contract and so precedent is being followed where process
is not legally specified. Petro Matad is following the process
fully in line with legislation and in full cooperation at every
step with the government agencies involved. We have provided
recommendations to the government that would streamline the process
in future. In the meantime, we will follow the process that the
current legislation and regulations require and that the government
dictates.
Progress has been much slower than we hoped to achieve, in part
due to the recent impact of Covid-19 restrictions but also the
result of the somewhat cumbersome Exploitation Licence application
procedure which has not been used for many years as Heron is the
first potentially commercial oil discovery in Mongolia for some
considerable time. However, the Company is encouraged by the
government's four-year plan 2020 - 2024 (
https://cabinet.gov.mn/?lang=en ) which seeks to increase
investment in the upstream oil and gas sector in Mongolia.
Consistent with this, we are receiving support from the relevant
authorities which recognise the importance of demonstrating to
potential investors that commercialization of discovered petroleum
reserves is a priority for the country.
Further updates will be provided in due course.
- Ends -
Further information please contact:
Petro Matad Limited
+97 670 141 099 / +97 675 751
Mike Buck, CEO 099
Shore Capital (Nominated Adviser and Broker)
Toby Gibbs
Jerry Keen
John More +44 (0) 20 7408 4090
FTI Consulting (Communications
Advisory Firm)
Sara Powell
Ben Brewerton +44 (0) 20 3727 1000
About Petro Matad
Petro Matad is the parent company of a group focussed on oil
exploration, as well as future development and production in
Mongolia. At the current time, Petro Matad holds 100% working
interest and the operatorship of three Production Sharing Contracts
with the Government of Mongolia. Block XX has an area of 10,367
square kilometres in the far eastern part of the country and Blocks
IV and V have an area of 29,062 square kilometres and 21,143 square
kilometres, respectively, in the central western part of the
country.
Petro Matad Limited is incorporated in the Isle of Man under
company number 1483V. Its registered office is at Victory House,
Prospect Hill, Douglas, Isle of Man, IM1 1EQ.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDDKFBKCBKDOBB
(END) Dow Jones Newswires
March 01, 2021 02:00 ET (07:00 GMT)
Petro Matad (LSE:MATD)
Historical Stock Chart
From Apr 2024 to May 2024
Petro Matad (LSE:MATD)
Historical Stock Chart
From May 2023 to May 2024