Source: Petro Matad                      Date: 18 November, 2010

Petro Matad has spudded the Davsan Tolgoi-4 (DT-4) exploration well, which could be the last well to be drilled in 2010 on the Greater Davsan Tolgoi prospect in Mongolia’s Block XX. The company disclosed plans to drill the well last week, when it announced it had secured a specially ‘winterized’ rig in eastern Mongolia.

The DT-4 well is being drilled vertically to an estimated target depth of approximately 2,020 metres.  The well is being drilled by contractor DQE International.  A further announcement will be made once drilling is completed, or as appropriate.  The well will test a four-way fold closure which forms part of the previously untested Davsan Tolgoi West 1 prospect.  DT-4 is 3.4 kilometres west of DT-1.

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 results will also help Petro Matad design 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.

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 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.