AIM-listed Mongolian oil company Petro Matad is aiming before year-end to achieve first oil from its Heron field development on Block XX onshore Mongolia.Petro Matad this month is scheduled to reperforate, stimulate and complete the Heron-1 well, following which it will install the surface equipment with the target of achieving first oil late in the third quarter via existing adjacent infrastructure.
The operator is currently evaluating multiple bids for the drilling contract and negotiations on oil processing and export are under way with PetroChina. Heron’s crude will be transported to facilities on the Chinese company’s Block XIX for export and sales.Next, the Heron-2 and Heron-3 wells will be drilled and completed with the aim of bringing at least Heron-2 into production before year-end.
Petro Matad said that new reservoir architecture data from Heron would be used to inform the choice of slanted versus horizontal wells and/or radial drilling and/or perforation fracking redesign to uplift future well performance.
The operator noted that radial drilling can improve well recoveries by 20% to 30%; while horizontal wells in PetroChina’s Block XXI have improved well performance and additional horizontal wells are planned.The company will evaluate the well performance of the initial Heron wells to guide further drilling — both locations and well design — with the aim of drilling at least five wells annually in the coming years to build the production profile to between 3000 and 5000 barrels per day of oil.
Petro Matad will also decide on implementation of a reservoir pressure maintenance project — water and/or carbon dioxide injection — to further uplift recovery. The company is targeting upwards of 30% ultimate recovery and peak production approximately 9000 bpd from the asset.The 2019 Heron discovery wildcat flowed at 821 bpd of 44 degrees API oil, the third best well test in Mongolia. The Heron field was estimated in-place resources of 194 million of oil, of which 33 million to more than 60 million barrels is deemed recoverable.
Mongolia’s average crude production in 2023 was 13,395 bpd. State-owned PetroChina operates 96% of the country’s production, which is trucked to Chinese refineries.“With land access permits in hand and following the recent equity raise we are now gearing up for a busy operational period,” said Mike Buck, Petro Matad chief executive.
Wildcat on the cards
Petro Matad also has plans for low-cost nearfield exploration with the high-impact Gobi Bear-1 wildcat due to be spudded around September/October, depending on rig availability.There are a number of prospects and leads within the Block XX exploitation licence with a total in place resource upside of around 430 million barrels of oil.Gobi Bear, which is located updip of the proven oil in the Heron-1 well, comprises an ‘end of basin’ stratigraphic/pinch-out trap of the Lower Tsagaantsav formations sandstones — the main reservoir unit in the Tamtsag basin.
The prospect has estimated mean in-place oil resources of 307 million barrels, with a geological risk assessment of 15% with the main risks being trap definition and migration, according to Petro Matad.The company currently holds 100% operated interests in two production sharing contracts — the Block XX exploitation area that covers 214 square kilometres in the far eastern part of Mongolia and the 7937-square kilometre exploration Block V in the central western part of the country.
The company expects later this year or in early 2025 to sign PSCs for two large blocks covering extensions of basins that are producing in neighbouring China. The existing Block V PSC, for which it has completed its exploration commitments, is due to expire in 2024.Petro Matad is also developing renewable energy projects in Mongolia under the SunSteppe joint venture, namely the Oyu Tolgoi green hydrogen demonstration project and the 50-megawatt battery energy storage system at Choir.
Source:https://www.upstreamonline.com