Petro Matad Ltd. announced Tuesday that it has entered into a farm-out agreement with BG Group whereby BG Group will acquire a 78 percent interest in Block IV and Block V in central Mongolia, with an effective date Jan. 1 (the Farm-out).
Under the terms of the agreement, BG Group has committed to cover Petro Matad’s portion of the agreed $28 million work program, which is expected to include Airborne FTG Gravity and magnetics, 2D seismic, core holes and exploration wells, as well as providing additional cash consideration to the Company of $4.55 million, which will be used by Petro Matad as working capital to fund ongoing operations and obligations.
The transaction remains subject to the receipt of Mongolian Government approval and other Mongolian regulatory formalities. A further announcement, in relation to these conditions, will be made in due course.
Commenting, Dr Oyungerel Janchiv, Petro Matad acting chairperson, said:
“I am very pleased to announce this agreement which will enable Petro Matad to move our exploration work on Blocks IV & V to the next stage. BG Group’s decision to enter Mongolia is an endorsement of the potential within the acreage and Petro Matad’s technical work to date. As a result of this transaction Petro Matad will be fully funded in relation to the remaining license commitments on Blocks IV & V. We look forward to building a lasting relationship with BG Group”.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you