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Petro Matad on track for 2017 drilling but it still waits on Shell exit payment

The explorer is working to secure a new partner for wells in Mongolia, following Shell's exit, and it says plans for 2017 drilling is still on track despite a delay in receiving a US$5mln payment.
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Shell is to pay US$5mln after it broke off a partnership entered into by BG Group

Petro Matad Plc (LON:MATD) told investors it is still on track with its drill plans but a US$5mln payment due from Shell has yet to be received.

A change in wording on an official document at the Petroleum Authority of Mongolia has held up the payment, which was effectively cleared in December when the Mongolian government approved the new assignment of interests in exploration blocks IV and V.

“While this is purely a technical matter it has caused a delay in receipt of the payment from Shell,” the AIM quoted company said in a statement.

“The revised wording has been essentially agreed by all parties and the Company expects signing of the revised protocols will occur within the next few days. Payment by Shell is therefore expected to be received within two weeks.”

Petro Matad is to retain 100% of the exploration blocks following Shell’s decision to withdraw (78% stakes were previously entered into by BG Group) as it rationalised its portfolio of assets following its merger.

The exploration group intention is to drill two wells in Mongolia during 2017. The schedule to accomplish this would see drilling tenders take place in January, with the spudding of the first well following in mid-2017.

In this morning’s statement, Petro Matad also said that its farm-out process, to bring in new partners, is ongoing and that a physical data in London has been attended by a significant number of interested companies.


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