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Future Plans
2008 Programme
• Second Russian well in progress.
• Additional seismic acquired on Sokolovskoe and southern structure.
• Sokolovskoe discovery to be appraised by second well.
• Further exploration well in Russia planned for southern structure.
• Sokolovskoe Production Licence application in progress.
• Two-well drilling programme planned in Hungary.
Future Plans
Hungary
The Inke Concession covers a huge area - some 2,297 sq kms (equivalent to 10 North Sea blocks) and holds a lot of untested potential. In order that Matra could accelerate and increase their programme in Hungary the company sought and secured a partner for the Inke Concession.
The technical and fiscal attractions of exploring and producing in Hungary remain self evident. Hungary is an established oil and gas province and taxes and royalties are amongst the lowest of producing countries. There is a ready and easily accessed market for oil and gas with European based prices and applying the latest technologies is helping to reduce technical risks.
Matra is carrying out an exploration programme on the Inke concession that includes exploration drilling, reprocessing of existing 2D and 3D seismic, and the review of existing discoveries on the block.
Russia
The Arkhangelovskoe License is valid until August 2009 and Matra are required to drill 4 exploration wells prior to that time. In the event of a discovery the license holder may apply for permission to immediately place the well on test production and at the same time apply for the discovery area to be converted to a 25 year production license.
Currently Matra are planning to start drilling on the first location in July. This well has been designated Arkhangelovskoe -12 by the local authorities and will test the Sokolovskoe prospect. It is Matra's intention to move the rig directly to the next location on completion of this well.
The merits of the Sokolovskoe prospect have been previously reported and Senergy Ltd concluded that there is an 80% chance of making a commercial oil discovery and a 40% chance of finding 32 million barrels or more of recoverable reserves with the first well. Senergy's evaluation considered only one of several potential reservoirs to be tested by this well and the license contains several other prospects. Arkhangelovskoe fits well with Matra's strategy of accessing low cost, low risk but high impact exploration and success during the 4 well programmes will clearly have a major impact on Matra.
The Arkhangelovskoe license is close to existing production and infrastructure and existing rail terminals that are already used for oil export. Future discoveries on the block could therefore be rapidly placed on production, subject to local authority approvals.
Orenburg is a highly prospective region for oil and gas and the local authorities have been both co-operative and welcoming. Now that Matra has a Russian registered subsidiary the company will be able to participate in licensing rounds in the region.
Matra has identified Central Europe as a focus area because:
• It is a proven oil and gas province
• It has suffered from lack of investment and the latest technology over the past 20 years
• Fiscal terms are amongst the most favourable
• Oil and gas prices are moving rapidly to open market conditions
• The enlarging EU is providing commercial stability
• Host governments are keen to see domestic resources developed
Matra's programme is:
• To fully explore the Inke Concession using the latest available technology
• To evaluate the existing discoveries for commercial production
• To identify opportunities to add shareholder value via new projects - firstly in Hungary and secondly in other Central European countries
• To establish early cash flow