Petro Matad (LON:MATD) confirmed it will drill at least one more well in 2010, after it secured a specially ‘winterised’ drilling rig in eastern Mongolia.
The company hopes to spud the Davsan Tolgoi 4 well as soon as possible.
The rig is currently being mobilised to the drill site, where it will target a new prospect - a ‘four-way fold closure’ which forms part of the previously untested Davsan Tolgoi West 1 prospect.
Last week Petro Matad called a close to the successful three-hole campaign, which propelled the company’s shares to a massive rally from 45 pence at the start of drilling to a new high at 199 pence back in October.
Each of the previous wells discovered oil in Block XX’s Greater Davsan Tolgoi prospect.
The latest well will test a second prospect, from the 14-lead Block XX inventory.
Davsan Tolgoi West has an estimated 21 million barrels of oil and it is separate from the Greater Davsan Tolgoi prospect.
The DT-4 well is intended to test oil migration - which is now proven in Greater Davsan Tolgoi - and it will assess the ‘charge possibilities’ for other leads and prospects to the west and south.
Overall the wells drilled in 2010 will provide the basis for ongoing revisions to 3D seismic interpretation and reservoir volume estimates, the company said.
The results will also help Petro Matad design of an appraisal programme for 2011.
The company highlighted that once DT-4 has been drilled, it will have tested a combined 142.5 million barrels from the pre-drill inventory – which has a pre-drill recoverable resource estimate of 882 million barrels
Under normal Mongolian winter conditions the specialised rig can operate until mid-December. However Petro Matad said that conditions are unpredictable and can be severe.
DT-4 is scheduled to be completed before mid-December, but mid-winter conditions in Mongolia are unpredictable and can be severe. Accordingly the company said it is is reluctant to forecast the possibility of commencing what would be a fifth well, DT-5, in calendar year 2010 although the contract with DQE extends to drill a further well using the same rig.