Petro Matad Limited, the AIM quoted Mongolian oil explorer, announces its audited final results for the year ended 31 December 2018. All dollar values are expressed in United States dollars unless otherwise stated.
The Company successfully raised funds in two rounds in the first half of 2018 in order to execute a multi-well drilling programme spread over two years (2018 and 2019). In the first placing, in January 2018, a total of 186.6 million new shares were placed with new and existing institutional investors, and certain Directors and senior management of the Company, raising gross proceeds of US$16.8 million at 6.5 pence per share. Petro Matad’s major shareholder, Petrovis Matad Inc. was the single largest participant in this raise.
The second raise, in June 2018, resulted in a total of 136.8 million new shares being placed with new and existing institutional investors, and certain Directors and senior management of the Company. The placing was conducted at a price of 10 pence per share and raised gross proceeds of US$18.1 million.
With funds in hand, the Company moved quickly to complete all necessary permitting and operational preparations for drilling and was able to complete the two wells during the 2018 drilling season. Activities were focused on Blocks IV and V in the previously undrilled Valley of the Lakes Basin of central western Mongolia and involved the drilling of Snow Leopard 1 in Block V and Wild Horse 1 in Block IV, both of which were drilled within budget and without any safety or environmental incidents. While the wells did not discover commercial hydrocarbons, they did provide excellent data to allow the calibration of the geology with the seismic and other data sets in these frontier blocks, which has enhanced the Company’s understanding and has helped to formulate plans for the next phase of exploration. The results of Snow Leopard 1 in particular have high graded the potential of prospects defined in Block V which are now the subject of further study to mature them to drillable status.
Having re-established the Company’s operating capability in 2018, preparations are in hand for a four well campaign in 2019 focusing initially on Block XX in the east of Mongolia adjacent to oil fields in production.
Operational Highlights
- Drilled two frontier exploration wells, Snow Leopard 1 and Wild Horse 1, in the previously undrilled Valley of the Lakes in central western Mongolia. Operations were completed within the 2018 drilling season and within budget
- Snow Leopard 1 in Block V proved up a working petroleum system in the Taats Basin, high grading nearby prospects as potential follow-up targets for future drilling
- Secured access to 3D seismic data in northern Block XX, completed 2D seismic reprocessing and remapped the prospects close to producing fields in neighbouring Block XIX
- Selected Block XX targets for the 2019 drilling campaign including the Heron 1 well which will appraise a structure already proven to be oil bearing on Block XIX immediately to the north
Post period end
- Contracted two rigs to execute the 2019 drilling campaign. Contracts allow the rigs to be retained for immediate appraisal of any discoveries made
- Three wells will be drilled in Block XX in 2019: Heron 1 and Red Deer 1 are expected to spud in July. Gazelle 1 will follow the drilling of Heron 1. Site construction is now complete at Heron and Gazelle, and is underway at Red Deer
- A fourth well is planned to be drilled in Block V or Block XX, depending on well results
- Applications submitted for two-year PSC extensions (until July 2021) on Block IV and Block V
Financial Highlights
- Two successful equity placings announced in January 2018 and June 2018, raising gross proceeds of $35.1 million to execute the Company’s multi-well drilling programme in 2018 and 2019
- The Group’s net loss after tax for the twelve months ended 31 December 2018 was $18.4 million (31 December 2017: loss $9.9 million)
- As at 31 December 2018, the Group’s cash position was $21.3 million, including Term Deposits (Financial Assets) (31 December 2017: $8.1 million)
- Since the year end, preparations for the 2019 drilling programme have been underway. As at 14 June 2019, the Group’s cash position was $16.6 million, including Terms Deposits (Financial Assets)
No dividends have been paid or are proposed in respect of the year ended 31 December 2018 (2017: Nil).
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