Business
Extension of Exploration Period of Block XX
Extension of Exploration Period of Block XX.
About this update from Petro Matad Limited
[{"type":"text","content":"\n \nRNS Number : 0440L Petro Matad Limited 30 August 2012 \n \n\nPetro Matad Limited \n(\"Petro Matad\" or the \"Company\")\n \nExtension of Exploration Period of Block XX\n \nPetro Matad, an oil exploration company with a portfolio of assets in Mongolia, is pleased to announce that pursuant to the provisions of the Petroleum Law of Mongolia the exploration term of the Production Sharing Contract (PSC) on Block XX has been extended for five years until July 2017.\n \nPetro Matad has entered its seventh contracted year at Block XX, one of three PSCs that the Company is exploring in Mongolia. As a part of the extension application process, Petro Matad has committed US$47.1m for exploration programmes in the next five years. The final year of the previous 2-year extension expenditure programmes has been subsumed by the new agreement. In addition, the new expenditure commitments can be offset against previous expenditure that exceeded past obligations. Apart from statutory land rental increases, there are no other changes to the current conditions of the PSC.\n \nExploration activities to date largely focussed on the Davsan Tolgoi prospect, as it was initially identified as the most prospective target. Meanwhile other works were carried out on areas adjacent to Davsan Tolgoi and in the north of Block XX, highlighting the additional exploration potential of that area. The southern portion of the Block contains six more promising sub-basins that have only been subject to initial gravity and limited 2D seismic surveys. The Company submitted that both the north and the south of the Block warranted more detailed exploration and time was needed to build upon the positive results to date. \n \nDouglas McGay, Petro Matad CEO, said: \"We welcome the extension together with the Government's appreciation of the exploration processes, the progress that Petro Matad has made and the need to systematically explore the remainder of Block XX. Over the last six years the Company has made a significant investment in Block XX and has a substantial surplus to the historic minimum spending commitments that could be used to offset the new obligations if necessary. We have accelerated our exploration activities on all prospective areas and the extra time that this e...