Petro Matad has been granted the normal 2 year extension to its Production Sharing Contract (PSC) on Block XX, from the Petroleum Authority of Mongolia (PAM), as provided for in the relevant laws of Mongolia. All current conditions of the Production Sharing Contract (the "PSC") remain valid during the period of the extension, which is renewable for further terms after July 19, 2013.
Minimum work commitments for the two year period amount to US $35,900,000, and no further mandatory relinquishments of area are required.
Relinquishment of parts of Blocks IV and V
The Company has received approval from PAM to relinquish 25.7 percent and 34 percent of the original areas of Blocks IV and V respectively, as required by the terms of the PSCs and Mongolian law. Blocks IV and V are now 28,998.60km² and 21,149.72km² in areas respectively.
The Company's studies of surface geology, 2D seismic, gravity, and magnetic surveys confirm that the relinquished areas are non-prospective for hydrocarbons, consisting of exposed basement rocks, or areas of shallow sedimentary fill above basement rocks.
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