24th Oct 2019 10:09
(Alliance News) - Mongolian oil explorer Petro Matad Ltd on Thursday reported positive results from testing of Heron-1 well in the north of Block XX and said that it will incorporate all data into a rapid reinterpretation of Block XX to secure an exploitation licence for the block.
Petro Matad shares were up 76% at 4.80 pence each in London on Thursday morning, following the news, valuing the company at GBP31.8 million.
The company said two separate cased hole drill stem tests were chosen based on the analysis of log data acquired over the 77 metres of potential oil reservoir in the Lower Tsagaantsav Formation in the Heron-1 well.
The first test was performed over a three metre zone at 2,872 metres and indicated an oil column height of at least 70 metres in the Heron-1 well.
The second drill stem test was performed over a 12 metre interval from 2,834 metres, with oil and some associated gas flowing to surface without the need for any artificial lift. The peak production recorded during the test was 821 barrels of oil per day and, for the main flow period, the well flowed at an average rate of 200 bopd.
The company said that Heron-1 flow rate was very encouraging and could indicate a "too conservative" recovery estimate for the Heron structure, however more wells would be required to prove the total volumes in the structure.
Petro Matad had previously assigned a pre-drill resource estimate for the Heron structure of 165 million barrels of in place oil, with 25 million barrels recoverable resource, based on a recovery factor of 15%.
"The test results at Heron-1 are even better than we expected given that the well is deep in the basin centre. The data gathered will now be analysed and used to secure tenure of a development area in Block XX with a view to transitioning Petro Matad from explorer to producer with revenue generation," said Petro Matad Chief Executive Mike Buck.
By Tapan Panchal; [email protected]
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