Petro Matad (MATD) - 6 fully funded wells to drill Q4 2018 to Q2 2019



Thanks. Very informative.


Well I do hope that there will be Wild Horse-1 activity this year, else the whole episode of drilling Snow Leopard-1 was a waste of time.

If you put your hindsight goggles on and go backwards now based on what is now known :

The plan was to drill Wild Horse-1 first, then Falcon-1 (as of early 2018 presentations).

Wild Horse-1 (Block IV) has only just(during SL-1 drilling it seems) received its final permits (chemical use) and so could not have been drilled until now anyway.

Falcon-1 (Block V) the 2nd planned well earlier this year was downgraded based on new 3D and removed.

Snow Leopard-1 (Block V) was the only drill ready prospect and which was the first to get all permits in place. MATD are also short of the required spend level of the license of Block V. It was rushed in as the replacement for Falcon-1

I would imagine Mike and his team were between a rock and a hard place here. Fox-1 the new exciting prospect from the new 3D is not drill ready and not permitted, permitting ongoing. Wild Horse-1 which was always your first drill, is not ready as final permits (chemical use etc…) are not in place. Falcon-1 which was your 2nd drill in the schedule is suddenly not worth drilling (too small) compared for Fox-1 so cannot be moved to be 1st.

You either cancel your 2018 drilling schedule (going down like a lead balloon)to allow Wild Horse-1 and Fox-1 back to back in 2019 or you put Snow Leopard-1 into play and drill that while you try to get the final permits for Wild Horse-1 to allow a seamless move from SL-1 to WH-1 in 2018 and go to the local temple to pray you get the Wild Horse-1 final permits before SL-1 finishes drilling.

If I go back now - with knowledge today - you really can see why the 2nd fund raise happened and why it was at 10p (compared to the earlier one at 6.5p - thats all down to Fox-1).

Looking at the prospects - Wild Horse-1 has simple faulting, its a 4 way dip (dome) and has soft amplitude anomalies. Pretty good target. Always was the 1st one they wanted to drill.

Snow Leopard-1 has complex faulting and therefore high sealing risk. In all the presentations after removing Falcon-1 there is nothing much exciting said about SL-1. Look yourselves…its as if someone writes the slide saying, yeah, we got this one too.

Fox-1 - extremely exciting, they spend 4 pages of their latest presentation detailing Fox-1. 3 way dip, normal faulting, bright spot on 3D, live oil shows in coring etc… etc… etc…

I feel the only reason they drilled SL-1 was to actually put the 2018 drilling into play and to bide time to get the WH-1 permits complete so they could drill WH-1, whilst also ensuring the spend on Block V was up to the level needed so as not to have any issues with Fox-1 which is also in Block V. And yes, in hindsight now I would say SL-1 was a strati-graphic test well in effect, one which also raised the spend level on Block V to the level required for compliance with the license. It had a (very limited) chance to strike oil and didn’t and no surprise there.

Had I known prior that WH-1 was still waiting for final permits I might have put two and two together prior to events, but I didnt, and anyway, its far easier in hindsight, everyone is an expert after the event, as always :slight_smile:

I dont blame Mike and his team for doing it this way if that is what happened, it makes sense in hindsight, just you started drilling with perhaps what was “off record internally” your worst prospect.

So in summary, my view, SL-1 was just a license spend compliance, waiting for WH-1 final permits, mobilize the rig and get in in the area ready for WH-1, fill in for the downgraded Falcon-1, in effect strati-graphic test well. And in view of that - I really cannot see them not spudding Wild Horse-1 asap, its a must and IMO, it WILL happen very soon.

All IMO, just my thoughts.


To put things into perspective.

Cormorant-1 (announced today as a duster) which was the big talked about well for TLW, PCL, ONGC was targeting only 124 million barrels recoverable, with follow on prospects for 790 million barrels. This of course being split between the 4 parties involved with the most going to Tullow who had 35%.

Now, Wild Horse-1 is 100% owned by Petro Matad.

It is targeting 480 million barrels recoverable (100% owned by MATD) with follow on prospects of 750 million barrels (100% owned by MATD)

Its way bigger than Cormorant-1…

That is the reason why Royal Dutch Shell having been talking with MATD and are keenly waiting for the result of Wild Horse-1 - because if it strikes oil then its pretty bolted on that Shell will be looking to farm in to Block IV and Block V given the potential of over 20 billion barrels recoverable in the 2 blocks. Thats why MATD is exciting.


I believe Wild Horse-1 is going to be spudded asap. They want it done before winter. They want the winter to be able to go to Shell and others and see who is willing to pay the most to farm in, in the event of an oil strike at Wild Horse-1.

Shell are in lead position (we know they cut Mongolia after they purchased BG, simply as they are not interested in Wild Cat wells in a new country, they are very interested in Oil discoveries in a new country - hence they told MATD they want to see Wild Horse 1 drilled and are willing to farm in and pay a lot more money AFTER a discovery). I say they are in lead position as they left in the contract that MATD have to pay Shell 5m US$ if they farm out Blocks IV/V to anyone other than Shell in future.

If, and its an big if, but if they strike oil at Wild Horse-1 then they have the winter to do a farm in deal with Shell or another.

Interestingly, if you look at the confidence levels “internally”… Snow Leopard was never planned in advance for appraisal. Wild Horse-2, an appraisal well for Wild Horse, is already planned and permitted. So why are they planning ahead already to appraise Wild Horse…they must have high confidence. I imagine the internal CoS for Wild Horse-1 is much higher than the advertised CoS.

Also the rig will be winterised and left over winter at Wild Horse location… this means if they strike oil at WH-1 they can in effect, if they want, delay Block XX drilling even more and do a straight appraisal with Wild Horse-2 in April…as its already permitted. They can then move to Fox-1 to drill that after WH-2.

And if Wild Horse-1 strikes oil I imagine that is what they will tell Shell and others… Do you want to farm in now for XXX million, or you want us to appraise Wild Horse and drill Fox-1 and you farm in for XXXX million later.

This is what makes MATD so very interesting over the winter if they strike at Wild Horse-1. A strike at Wild Horse-1 is going to rocket the price for sure… 480MMBO recoverable and then other prospects derisked for 750MMBO recoverable - all 100% owned. But those who then sell the initial stike will perhaps miss the potential bigger rise, which will be when/if a Super Major farms in over winter… A farm in over winter and new funds and free carries could see a number of wells sunk into Blocks IV and V, so the farm in potential company will not want to wait for MATD to appraise and discover more oil and also will not want to waste time in the 2019 drilling season, so the potential for a winter period farm in is high…IF they strike oil at Wild Horse-1.

All very interesting.


Thanks Pro_S2009, I worry that Wild Horse will not get to be drilled this year. We are already late in the season and as we know from previous years temperatures can plummet in October/November, in 2009 the MATD drilling program was halted on 10th November:

If that happens I expect the share price to fall further.


All systems are go, the company has been emailing those asking the question that the well will spud in 2018 as planned and an RNS will be out when the well has spudded.

My estimated locations of SL-1 and WH-1 and the distance (bird flies and by road). Bayansair (Bayansayr) is the nearest town.


Bayansair (Bayansayr) is the nearest town. Daytime temperatures (they only drill daytime) are forecast to be above zero until mid-November.

October quite warm daytime.

November slipping to a negative daytime temperature from the 19th November onwards. Cold snap starting 18th November evening. Working back 30 days from then… the latest date spud should be (for completion and logging in 2018) should be around 20th October. So as we stand now.

Prep work on WH-1 location began in August. Everything possible done in advance for seamless move.
SL-1 finished P&A on Friday 21st Sept.
Move and rig up has been ongoing to 8 days as of today.
22 days remain to get spud done by latest 20th October
Hopefully spud between 8th and 15th October.


Internal CoS for WH-1 is actually 20%. So the Elephant discovery of 2018 boils down to two last chances, CHAR with Prospect S and MATD with Wild Horse-1.

Success case upside is greater on MATD as the prospect is 100% owned and the PSC terms are superb.

A mere 150 million barrel recoverable size find on Block IV for MATD would have an NPV10 of 1.27 billion US$ thanks to low cost of development wells, easy trucking and very good PSC terms ** (that value will be higher now due to rising oil prices)

NPV10 based on Economics run at Dec ‘17 Forward Curve prices: 2018 $63.67/bbl, 2019 $60.58, 2020 $58.56, 2021 $57.62, 2022 $57.25, 2023 $57.22, 2024+ 2% Esc

Well Name: Wild Horse-1 Block IV

Targeting 480 million barrels recoverable (mid case) 100% owned

Additional follow on prospects of 750 million barrels rec. (900 million rec. high case) derkisked in the Wild Horse area if Wild Horse-1 is a success.

Internal company estimates give 20% chance of success for Wild Horse-1

Wild Horse-2 appraisal well already permitted for, in the event of success.

Wild Horse-2 would drill into the other side of the WH lead in the event of a WH-1 discovery.

Due to analogous basin geology across the border in China there is a higher than frontier chance of success for frontier levels of potential

Notable Chinese productive basins include: Junggar Basin 10 Billion barrels recoverable, Songliao Basin 20 Billion barrels recoverable and Bohai-S. North China Basin with 40 Billion barrels recoverable.

Well defined 4-way dip structure and amplitude anomalies that are indicative of hydrocarbons. (Soft amplitude anomalies which conform to structure)

CEO Mike Buck comments that it is “A must drill well”. Royal Dutch Shell have told MATD they want to see Wild Horse-1 drilled.

Endorsed by Wood Mackenzie by their inclusion of Wild Horse-1 on their “one to watch wells in 2018” placing Petro Matad on a list alongside super majors like ENI and Repsol. The only onshore well to make it into the WoodMac list.

** PSC terms (the important bit to value any discovery with)

0% Corporation Tax

Royalty: Block IV 8%

Costs of Exploration, Development, Operations and Transport can be recovered in the success case. The implication for this is that on any success, when coming to arrange finance, this puts the company in a very strong position as it can demonstrate it can repay debt out of Gross revenue rather than profits. Yes, that is remarkably excellent, even transportation costs to sell the oil are recoverable. Pretty much WOW… The whole lot, explo, dev, op, transport…all recoverable.

Contractor Profit oil split: Block IV 50% to 57%

You cannot really value an oil discovery unless you also know clearly the PSC terms, then you are able to get a real good read on the NPV10. Given the present oil prices and forward curve the NPV10 value stated above is actually low and should be considerably higher now. The economics and IRR get better the bigger the find, so that is based on 150 MMBO, in the event after any discovery and appraisal that Wild Horse lives up to is Pmean of 480 MMBO recoverable, the figures are mind blowing, thats why its a “well to watch”.


Operations Update.

They are behind where I expected them to be, however, they are confident they can spud and complete Wild Horse-1 this year, with spud now being later this month.



Looks like they have joined Twitter too, finally.



Looking at the RNS history you can see clearly the change from when the new CEO Mike Buck was brought in.

5th July 2017 Ridvan Karpus (RK) CEO

Plan to drill Snow Leopard-1 (50 day drill) and then Wild Horse-1 (20 day drill).

(The regime of RK wants to drill SL-1 and then WH-1. We know from presentations that SL-1 has no amplitude anomalies and is supposed to be self generating. WH-1 has amplitude anomalies and is based on migration from nearby massive kitchens).

19th Sept 2017 Ridvan Karpus (RK) CEO

Plan for restructure of the management team with experience being bought in (RK will step down).

Rig for proposed SL-1 and WH-1 still not certified and not likely to be until at least October (maybe later) and so, with mobilization from East to West then drilling cancelled until 2018. Both ongoing permitting.

New 3D seismic over Tugrug basin. New 2D based on comments from potential farm in partners.

21st November 2017 Mike Buck (MB) CEO

Drilling rig is now certified, finally. Contract amended.

19th January 2018 Mike Buck CEO

MB drops Snow Leopard-1.

New drilling program will be Wild Horse-1 (always drill your best first) and then Falcon-1. WH-1 has bright amplitude anomalies. Falcon-1 has live oil in nearby core hole.

At this time both wells are in the process of permitting, only SL-1 is nearly completely permitted but now dropped like a lead balloon.

13th February 2018 Mike Buck CEO

Plan is to drill WH-1 and Falcon-1, permitting is in progress for both. Wild Horse-1 is now a 30 day to 45 day drill.

12th April 201b MB CEO

Bugger…the new 3D has revealed the Falcon-1 prospect is very much smaller due to faulting now apparent with the new 3D. In view of this Falcon-1 is dropped and while they work on the 3D for a new prospect now seen (later will be known as Fox-1) they will now put Snow Leopard-1 back into the drill program.

Its the only well nigh on permitted for and Wild Horse-1 is still waiting for a few final permits.

My comments/opinions = At this stage Mike Buck is feeling stressed.

His drill program is now a well he wanted to drop (SL-1), then the big prospect Wild Horse-1 he wants to drill, then 2 small wells on Block XX. Not very awe inspiring at all. He knows there are good other targets from the new 3D and 2D.

Drill program now :

1 Potential duffer SL-1 he dropped.
2 Great Propsect WH-1
3 Small low risk Block XX drill
4 Small low risk Block XX drill

14th May 2018

SL-1 is fully permitted for. WH-1 still does not have all permits in place.

New exciting Fox-1 prospect from the new 3D which replaces Falcon-1, but which has to start the long permitting process.

13th June 2018

Placing to raise money to add 2 more drills. Directors buy in to the placing at 10p a share price.

New drill program :

1 Potential duffer SL-1 he dropped.
2 Great Prospect WH-1
3 Excellent Prospect Fox-1
4 Significant Prospect Red Deer 1
5 Small low risk Block XX drill
6 Small low risk Block XX drill

My comments/opinions = At this stage Mike Buck is feeling much happier. Even though he still has to drill the SL-1 well he dropped initially (has to drill as its the only well fully permitted for) he now has 5 excellent prospects to drill after it. Wells 2 and 3 being high impact, well 4 being excellent size and then wells 5 and 6 being good in that they both individually are worth more than the current share price on success and are relatively low risk.

The rest is then very much near term knowledge. WH-1 finally got the chemical permit during SL-1 drilling last month and so can go ahead. SL-1 drilling was a duster but a good stratigraphic test well in effect, lots of data obtained.

So, MATD have drilled the well that Mike Buck dropped initially, and the next three wells are the ones that he really wants to drill. Wild Horse-1 then Fox-1 and then Red Deer-1.

Thats the hindsight after the event read of the operations RNS’s and what happened in terms of the operations program. You can see why MB is pushing to get WH-1 done this year, its the well he really wanted to drill first, with both Fox and Red Deer being new prospects and wont complete permitting until Q1 2019.

Whilst some people may bemoan the 2nd placing - my view is that Mike Buck turned the company around at that point. Going from (ignoring SL-1) one prospective big drill and 2 small ones, to then three prospective big drills and 2 small ones. That second placing at 10p in which directors purchased lots of shares, is what has left MATD so exciting now with lots of back up. If they had not done it then things would not be so much lower risk now.





Wild Horse-1 is spudded.




Lets hope it ain’t a duster… If successful, this would mean an enormous change for MATD and the share price would certainly explode (at least in the medium to long term).


Excellent timing for the rise yesterday…as we know from Snow Leopard-1, on day 39 just as they entered the upper secondary target and got C1 to C5 gas shows…big volume day.

And now, just as they should be entering the upper of the 3 targets (largest at the bottom), we get some good buying coming in.

So, looking good…nothing is certain, but looking good. Need to see sustained buying and a rising price, with lots of fall backs as people sell for a quick profit, followed by more buying…repeat and repeat.


Weather has been excellent really.

This coming week they should enter the Main Target Zone, if not already. Fingers crossed something good happens, but as always, be prepared for the duster, its the most likely outcome.



Wild Horse-1 is a duster as per todays RNS.

Got to wait for the drills in 2019 now (all of which are fully funded based on the current plans for 4 drills.

If you take the content of the RNS it looks like :

Next up will be the three low cost Block XX drills. These are all in effect appraisal and have very high chance of success. Each and every one of them is worth more than the current share price.

Drill these three first seems to be the plan, then I think a fund raising at a much higher price.

Fund raising will be for drilling in Block V where they now have (based on the SL-1 drill and latest seismic) three very large 4 way dip prospects. The fund raising will therefore pave the way for a 2 or 3 well drill campaign in Block 5. This is when the rig will drill Fox-1 and then one or two other new prospects they are working on.

So thats how I see it panning out.

1st Drill Block XX (already funded - no need for fund raise)
2nd Drill Block XX (already funded - no need for fund raise)
Fund raising based on success in Block XX and new leads.
3rd Drill Block XX (already funded - no need for fund raise)
1st Drill Block V (Fox-1) (already funded - no need for fund raise)
2nd Drill Block V (new prospect in the south of the license) Fund raise required.
3rd Drill Block V (new prospect in the south of the license) Fund raise required.