Petro Matad Provides Update on Operations at Blocks IV, V in Mongolia

Petro Matad Limited provided Wednesday an update on its operations, results of the interpretation of the 136.7 mile (220 kilometer) of seismic acquired over Blocks IV and V in central Mongolia in November 2013 and the continuing farmout process.

In Block IV, 40.3 miles (65 kilometers) of seismic were shot over a thrusted anticlinal feature seen on a single east – west seismic line in the western part of the Block. The new seismic confirms a three way dip closure on the downthrown side of major strike slip fault with possible recoverable reserves of 60 to 100 million barrels oil. A smaller, but a well imaged, more robust four way dip closure with possible reserves of about six million barrels can also be mapped within this overall fault prospect.

In Block V, 96.3 miles (155 kilometers) of seismic were shot over a large faulted anticlinal area mapped on existing seismic. Unfortunately, the new seismic indicates that the section continues to rise towards the northeast boundary fault that forms the basin margin. There is a closure against this basin margin but the relatively shallow depth of this closure makes it relatively high risk.

However, the 2013 seismic has shown two new fault traps in the deepest part of the sub-basin in Block V. One is a tilted fault block, interpreted as a rotated (low angle) normal fault. The second is a closure in the footwall of a reverse fault. Both these leads have robust closures. They also lie within the present-day Syn-Rift source kitchen so migration and timing are considered low risk. Although both prospects are relatively small with possible recoverable reserves of 22 to 24 million barrels oil, either location would be excellent candidates for testing the potential of this Tugrug sub-basin in terms of reservoir quality and source potential.

There are no oil exploration wells and only limited seismic coverage in Central – Western Mongolia so these are the first drillable prospects identified in this frontier area. Both can be considered as locations for possible basin opener wells that will advance significantly knowledge of and confidence in the hydrocarbon potential of the area.

Further details on these prospects can be found in the Investor Section of the Company’s website.

We are confident that there are many other similar basin areas and prospects within the Company’s acreage. Unfortunately, the existing seismic coverage over most of Blocks IV and V and the southern half of Block XX is limited and hence insufficient to confirm this expectation. We are therefore looking at other technical alternatives to high grade our acreage. One such technique is airborne full tensor gravity gradiometry (FTG) which has been used successfully in other onshore areas such as Africa.


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