During the course of 2020, Aim-listed Mongolian oil company Petro Matad focused on progressing the Block XX exploitation licence application, working closely with the relevant Mongolian government authorities, it noted in its financial results statement for the year ended December 31, 2020.
The company applied for and was granted a moratorium on Block XX while the exploitation licence application progressed.
A competent persons' report for the northern part of Block XX including the Heron structure was prepared by independent reserves certifiers LEAP Energy.
LEAP’s total mean unrisked in-place oil resource estimation for the Heron structure was 194-million barrels, which is about 20% higher than Petro Matad’s internal estimate.
The company secured approval of the detailed environmental-impact assessment (DEIA) for the Heron development phase as part of the Block XX exploitation licence application process.
The Ministry of Mining and Heavy Industry (MMHI) approved the company’s reserves report for the Heron discovery, which it notes is a critical step in securing the exploitation licence.
An assay of Heron 1 oil was carried out and confirmed that it is a light, sweet, waxy crude similar to the oil produced in the neighbouring Blocks XIX and XXI and is one of the lightest oils found to date in the Tamtsag basin.
Also, Petro relinquished Block IV with a view to potential partnering and relicensing of its more prospective areas in the future.
The company made a partial relinquishment of Block V, retaining the prospective Taats and Tugrug basins and applied for and was granted a moratorium to allow more time to secure partners and/or funding for the next phase of Block V exploration.
Petro said it put in place cost saving measures to preserve its financial resources while progressing the Block XX exploitation licence application, recognising the delays caused by the Covid-19 pandemic.
At period-end, the group’s cash position was $939 000 including term deposits.
The group’s net loss after tax for the period was $3.2-million.
No dividends have been paid or are proposed for the period.
The Block XX exploitation licence application continues to progress through the government’s approval process.
The company and the MRPAM have agreed the area of Block XX that will be retained under the exploitation licence, which includes the entire extension into Block XX of the proven and producing Toson Uul basin.
In the final step of the exploitation licence application process, the company’s plan of development was supported by the Mineral Resources Professional Council (MRPC).
Nine items requiring clarification were raised and dealt with. Only minor amendments to the text of the plan of development were required and these are being completed in parallel with the preparation and approval of the MRPC conclusion.
Petro has now lodged with MMHI its formal application for the award of the Block XX exploitation licence.
To ensure funding of the company through the exploitation licence application process and the preparations for the next phase of operations, the company’s largest and founding shareholder, Petrovis Matad, agreed to make available to the company a loan facility of up to $1.5-million, against which the company can draw funds as required.
In June, $450 000 was drawn to meet ongoing running costs.
“There is no doubt that 2020 was a challenging year due to the disruption triggered by the global health pandemic. Despite the difficulties, the company worked hard throughout to progress the application for the exploitation licence for Block XX through a complex and lengthy process.
“We appreciate the patience that many of our shareholders have shown as we continue to work with the Mongolian government to secure the requisite approvals. The formal application for award of the licence has now been submitted to the Ministry and we are working with the relevant departments as they process the necessary documentation,” CEO Mike Buck said.