Petro Matad: Commercial Flow Rate At Heron-1
Edison | Oct 25, 2019 08:14AM ET
Petro Matad Ltd (LON:MATD) has announced the flow test results from Heron-1, drilled in September in the north of Block XX. The well flowed hydrocarbons from a 12m interval from 2,834m in the upper portion of the Lower Tsagaantsav Formation without the need for artificial lift. The well flowed 46° API oil at an average rate of 200bopd, making it one of the lightest oils recorded in the basin. A peak production of 821bopd was achieved. We assumed an initial well production of 240bopd in our model. Petro Matad will now incorporate all data from the drilling campaign into reinterpretation of Block XX to apply for an Exploitation Licence from the Government of Mongolia to be able to put Heron-1 into production in 2020. We valued Heron at 4.9p/share (out of our total 20.1p RENAV for Petro Matad).
Petro Matad has announced Heron-1 flow test results. The test encompassed two drill stem tests (DSTs) over two different intervals over the 77m of potential oil reservoir. DST-1 tested over a 3m zone near the base of the sands seen in the well and proved a 70m oil column but did not flow naturally. DST-2 was performed over a 12m interval from 2,834m in the upper portion of the Lower Tsagaantsav Formation and flowed oil and associated gas without the need for artificial lift. A peak production of 821bopd was achieved and the well flowed at an average rate of 200bopd with an API gravity of 46°, making it one of the lightest oils recorded in the basin. No formation water was produced during the test.
Heron-1 will now be suspended and Petro Matad will analyse all data to determine recoverable resources, previously estimated at 15mmboe, and the sustainable deliverability of the well and the reservoir. Once all data are analysed, the company will apply for an Exploitation Licence from the Government of Mongolia to bring Heron-1 to production in 2020.
Business description
Petro Matad is a pure-play Mongolian exploration company with a 100% equity interest in Blocks IV, V and XX. Management has drilled three exploration and appraisal wells in 2019, targeting low-risk prospects in Block XX and is now focusing on analysing Heron-1 results.
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