Through its subsidiary Central Asian Petroleum Corporation Limited (“Capcorp”), Petro Matad Limited was awarded Production Sharing Contract on Block V on 8th July 2009 together with Block IV. Block V lies in the central part of Mongolia, approximately 330km southwest of the capital Ulaanbaatar, and covers an area of 32,030km².

Regional scale geological mapping and gravity and magnetic surveys gave a broad indication of the presence of sub-basins which appeared to contain sediments of Jurassic-Cretaceous age and hence may be prospective for oil.

Modern satellite gravity data was combined with geological surface mapping to define the depth and extents of the sub-basins to a reasonable level of accuracy. Careful calibration of the modelling was conducted in three sub-basins in Mongolia where accurate depth information was available from wells and seismic data.

The presence of source rocks in individual sub-basins cannot be proven without drilling wells; however, sub-basins with a depth to basement of less than 2,000 m are unlikely to have generated oil. On this basis, all four of the sub-basins in Block V have potential for oil generation. The largest of the prospective sub-basins has a length of approx 180 km, a width of approx 30 km and a maximum depth of approx 6,000 m.

Block V has sufficient potential to warrant the next step in exploration. Petro Matad is planning to acquire an extensive surface gravity and magnetics programme, a detailed surface geological mapping programme and a regional 2D seismic programme as part of its early exploration programme on the Block.