Tuesday, November 2, 2010

[cpsnewswire] BREAKING NEWS: Petro Matad Delays Test Program Till 2011, Shares Plummet 20%

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Petro Matad delays E. Mongolia test program

Mogi: Petro Matad (AIM:MATD) shares closed 19.65% lower on Monday to 110.89p in London AIM trading. Shares nosedived, immediately following this release from the company, , dropping as low as 95 pence on the day, but MATD still marks the year with a 485% gain YTD.

HOUSTON, Nov. 1 (Oil & Gas Journal)-- Petro Matad Ltd., Isle of Man, UK, will delay until spring 2011 a test program on Block XX in eastern Mongolia's Tamtsag basin because of winter onset after encountering hydrocarbons in all three wells drilled this year. 

The company is negotiating a drilling contract that is expected to allow it to drill one and possibly two more wells through as late as mid-December 2010. 

Petro Matad will set production casing at the DT-3 well, which went to 1,266 m in basement on the Davsan Tolgoi prospect on the 10,340 sq km block. It had hydrocarbon shows while drilling the primary objective Lower Tsagaantsav formation and the overlying Upper Zuunbayan formation. Both formations are Lower Cretaceous in age. 

Upper Zuunbayan sandstones exhibited live oil shows at 750-765 m. Preliminary petrophysical analysis of wireline logs delineates 5.5 m of potential net pay Porosity in the net pay intervals averages 23%. 

Lower Tsagaantsav sandstones had 10 m of weak live oil shows at 1,005-1,015 m with elevated pentane levels at 945-1,216 m. 

Preliminary petrophysical analysis of wireline logs indicate that the Lower Tsagaantsav sandstones include more than 50 m of high-quality reservoir rocks with average porosities above 20% that are evenly distributed over the 281-m gross interval at 935-1,216 m. However, calculated hydrocarbon saturations are low throughout, indicating that the Tsagaantsav is a poor candidate for testing at this location. 

DT-3 was designed to test the continuity of hydrocarbons in Tsagaantsav reservoirs between the area of the earlier DT-1 and DT-2 test wells, about 8 km northeast. Comparison of the high calculated hydrocarbon saturations at DT-1 and DT-2 with low saturations at DT-3 indicate that DT-3 is in a separate fluid compartment from DT-1 and DT-2. The extent of each compartment will be evaluated by remapping the 3D seismic survey. 

DT-3 was also designed to provide a wider sampling of Tsagaantsav reservoir quality along Greater Davsan Tolgoi prospect. The actual 50 m or more of reservoir quality rock encountered at DT-3 compares favorably with the assumed 10.35 m net reservoir thickness that formed the basis of the 2009 mean recoverable resource estimate of 121.5 million bbl of oil for the prospect. 

The next step in the process is compilation and assessment of drilling data, including reprocessing and remapping 3D seismic survey over Davsan Tolgoi to update the resource and plan 2011 appraisal drilling. The company is also evaluating tenders for 2D and 3D seismic surveys on Block XX with a view to shooting during winter. 

In Blocks IV and V, which total 71,040 sq km in central Mongolia, the 4,000-station gravity infill survey has just been completed, and the data will be integrated with 2D seismic survey now being processed.

Link to article

Link to the original announcement:

-       Block XX Exploration Drilling Update, Petro Matad Ltd., November 1, 2010



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CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at or +976-99996779.


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