Mongolian oil exploration group Petro Matad enters into a farm-out agreement with BG Group

Mongolian oil exploration group Petro Matad enters into a farm-out agreement with BG Group for a 78% interest in Block IV and Block V in central Mongolia.

Under the terms of the agreement, BG Group has committed to cover Petro Matad's portion of the agreed US$28m work program, which is expected to include Airborne FTG Gravity and magnetics, 2D seismic, core holes and exploration wells, as well as providing additional cash consideration to the Company of US$4.55m, which will be used by Petro Matad as working capital to fund ongoing operations and obligations. To accelerate the exploration evaluation process the majority of the work will be undertaken in 2015 and 2016. The transaction remains subject to the receipt of Mongolian Government approval and other Mongolian regulatory formalities.