Petro Matad, BG Group Partner Up In Two Blocks In Central Mongolia
Petro Matad said the farm-out agreement concerns Block IV and Block V in central Mongolia. Under the deal, BG Group will acquire a 78% stake in both blocks, and in return BG Group will pay Petro Matad’s share of a mutually agreed USD28 million work programme as well as pay Petro Matad USD4.5 million in cash.
The work programme will ensure the minimum work commitments on the two blocks are fulfilled, and Petro Matad said the majority of work will be undertaken in 2015 and 2016 and consist of 2D seismic work, core hole and exploration wells and an airborne FTG gravity and magnetics study.
Petro Matad said it will use the USD4.5 million as working capital to fund ongoing operations and obligations. The deal remains subject to approval from the Mongolian government and other Mongolian regulatory formalities, it said.
Petro Matad said it will retain a 22% stake in Block IV and Block V under the deal, but said it continues to hold a 100% interest in Block XX, which is nearby.
“BG Group’s decision to enter Mongolia is an endorsement of the potential within the acreage and Petro Matad’s technical work to date,” said Acting Chairperson Oyungerel Janchiv. “As a result of this transaction Petro Matad will be fully funded in relation to the remaining licence commitments on Blocks IV and V. We look forward to building a lasting relationship with BG Group”.
Petro Matad shares leapt 44.2% to 7.75 pence per share on Tuesday morning whilst BG Group shares rose by 4.2% to 888.62 pence.
By Joshua Warner; firstname.lastname@example.org; @JoshAlliance