Petro Matad’s affiliate Central Asian Petroleum Corporation Limited (CapCorp) has reached an agreement with Shell's affiliate company BG Mongolian Holdings Limited (BGMH), in relation to the latter firm’s exit from the Mongolian Block IV and V Production Sharing Contracts.
As part of the deal, Shell's affiliate will pay an exit amount of $10,005,303, as stipulated by the farmout agreement, and will pay a further $5,000,000 upon completion of the reassignment. This further amount is refundable to Shell's affiliate, should CapCorp secure a partner for any of the two Blocks during the exploration period or any extension of exploration period.
Any farmout entered into by CapCorp with a third-party company will be at its discretion. The reassignment of BGMH's 78 percent working interest back to CapCorp is subject to government consent.
"I am very pleased that Shell and Petro Matad were able to conclude this agreement. The cash to be provided by Shell will enable the company to continue its planned work program culminating in exploration drilling next year,” said Enkhmaa Davaanyam, Petro Matad chairperson, in a company statement.
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