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Petro Matad - Four exploration wells planned for 2019

Petro Matad offers investors exposure to a fully funded 2019 exploration campaign targeting near-field, low-risk prospects as well as basin opening, high-impact potential. 2018’s two-well programme in the frontier Blocks IV and V did not yield a discovery, but data from the first ever exploration wells in the region have already highlighted three new structures in Block V. One of the three identified Block V ‘Raptor’ prospects is a candidate for drilling in 2019, with the alternative 200mmbbl Fox prospect remaining an option. Three wells will also be drilled in the low-risk Block XX analogous to producing fields to the north-east, including the more material 48mmbbl Red Deer prospect in the south-west of the block. Attractive fiscal terms and the scalability of developments enable relatively small oil discoveries to be commercialised in the current oil price environment. Our risked valuation post assumed farm-out value dilution is updated to 20.4p/share (down 34%) at $70/bbl long-term Brent. Our valuation remains highly sensitive to oil price assumptions and exploration outcomes.