29th Jun 2015 09:07
LONDON (Alliance News) - Petro Matad Ltd Monday reported a narrower loss in 2014 after a "quiet year" that resulted in the company partnering up with FTSE 100-listed BG Group PLC over two of its blocks in Mongolia, and said the first well will now be drilled in 2016 and not 2015 as originally planned.
The oil and gas company operating in Mongolia reported a USD3.9 million net loss in 2014, narrowing from a USD7.5 million loss in 2013. The company does not currently generate any revenue.
The loss narrowed after it spent USD1.9 million on employee benefits compared to USD3.5 million a year earlier, whilst exploration expenditure dropped to USD266,000 from USD1.6 million and other expenses totalled USD1.5 million from USD2.0 million. Consultancy fees and depreciation and amortisation costs also fell in the period.
Petro Matad said it had been a "quiet year" operationally as it focused on finalising the deal to farm-out part of its licenses to oil major BG Group. That agreement was for BG to earn up to a 78% interest in Blocks IV and V by paying for the first USD28 million of gross expenditure and a cash payment of USD4.6 million, of which half has been received.
"The farmout is a key milestone as for the first time in its history the company will be undertaking operations with a partner. That the partner is a world class oil and gas producer and explorer enhances the impact of the transaction," said Petro Matad.
The company and BG are now undertaking seismic work and geological studies over the two blocks and two exploration wells will be drilled in 2016. No exploration wells have been drilled previously on the blocks.
"The announcement of April 7, 2015, anticipated that all work programme activities, except one of the exploration wells, would be completed in 2015. The company now anticipates that both exploration wells will be drilled in 2016, with the remaining work programme activities still being undertaken in 2015," Petro Matad said Monday.
By the time that well is drilled in 2016, the USD47 billion mega-merger between Royal Dutch Shell PLC and BG Group should be completed.
Talks about farming-out Block XX are continuing and there is "minimal exploration" planned on the block in 2015, Petro Matad said.
Petro Matad shares were untraded on Monday, last trading at 4.75 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
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