Petro Matad reported on 17 September 2019 the company has drilled Red Deer-1 to a TD of 2000 m. No hydrocarbon bearing zones were identified during drilling and this has been confirmed with wireline logs. The well will therefore be plugged and abandoned.  The primary target, Lower Tsagaantsav primary Formation, was encountered at 1632 m, 30 m shallower than the pre-drill prognosis, and comprised a thick interval of good quality sandstones interbedded with claystones. During drilling no significant oil shows observed upon entering the reservoir target. Analysis of drilling gas data suggests the presence of potential source rocks shallower in the drilled section, but the absence of significant oil shows indicates that these source rocks are not fully mature for hydrocarbon generation in the vicinity of the Red Deer prospect.   Petro Matad spudded Red Deer 1, located in Block XX in the Asgat Sag of the Tasmtsag Basin, in eastern Mongolia on 4 August 2019. This NFW, drilled on a three-way dip fault bounded closure in the basin center in the southern part of Block XX, is a basin play opener well and targeting Early Cretaceous petroleum system proven in surrounding basins. The mean prospective recoverable resource assessment for the Red Deer Prospect is 48 MMbo.  The well was planned to be drilled to a PTD of 2,100 m and was expected to take up to 35 days to complete.The well was drilled by the Daton Petroleum Engineering and Oilfield Service LLC rig, DXZ1.   Petro Matad has a three wells programme planned in 2019 in Block XX. The first well, Heron-1, has been completed with oil and shows in early September 2019.  Red Deer 1 is the second well spudded in Block XX.  The Gazelle 1 well, the third well, with 13MMbo mean prospective recoverable resources, is currently planned to spud in Q3 2019. Gazelle 1 will target a similar structure to Petro China's best producing field in Block XIX which is only 12 km to the northeast.   Background Information    Petro Matad awarded PSCA block XX in 2006. In September 2011, the company has received approval from the Petroleum Authority of Mongolia (PAM) to have a two-year extension to its Production Sharing Contract (PSC) on Block XX.  In August 2012 Petro Matad extended Block XX for five years until July 2017.  In 2016, Petro Matad reported that the PAM provided a one-year moratorium on Block XX at the companyâs request, which freezes for one-year obligations that would have normally been incurred, while at the same time extending the current license period to July 2018. The moratorium enables the company to focus on Blocks IV and V work programmes in the immediate term.  Petro Matad announced on 5 January 2018 that it has been formally extended its PSC Block XX for a further two years to 4 July 2020. The company reported this is a very positive development and again indicates the support for Petro Matad within the relevant government departments in Mongolia. It is also significant in that Block XX contains considerable prospective exploration potential close to Petro China's production infrastructure which is in operation immediately to the North.  Petro Matad has drilled 11 wells in Block XX between 2010 and 2011. The disappointing drill and test results have resulted in the downgrading of the prospectivity of the Davsan Tolgoi Anticline and drilling and seismic activities will be suspended while further studies are performed. A decision was made in May 2012 by the company that no further drilling or testing will be conducted on Block XX on the status of its review of its 2010 and 2011 drilling programme in Block XX in the Mongolia. Â   In addition to Block XX, Petro Matad also holds Block IV and V in the Central Gobbi area.Â  Petro Matad completed two NFWs in 2018 with drilling objective in the Jurassic â Cretaceous Play, but the both wells are failed to achieve oil/gas discoveries. The first well, Snow Leopard-1, is situated in Block V in the Taats Basin, as a basin play opener, was spudded on 9 July 2018 and completed reaching a TD of 2,930 m as a dry hole on 20 September 2018. The second well, Wild Horse 1, is situated in Block IV in the Baatsagaan Basin, was spudded on 23 October and completed reaching a TD of 1,490 m as a dry hole on 26 November 2018.
Red Deer 1 explo. (Petro Matad 100%) in Block XX, P&A, dry.