Farm in

While we await the promised news of the finalised exploration program approval by the Mongolian government this month, there may be more immediate price drivers. Market discussion is running hot over who will pick up the Petro Matad farm in option to get a look in on their block IV and V oil estimate of between 9 - 23 Billion barrels. Currently China owns all of Mongolia's oil production, this occurred to the surprise of the Mongolian Government , when US oil explorer sold out its interests in the Tamsag Basin blocks to PetroChina (from memory - fact check required) and the most likely contenders are Chinese majors. However there is a strong possibility there is interest from India.

New Delhi (Sputnik) — That India-China compete in various geographies to gain strategic and economic advantage is common knowledge, but what’s new is that smaller economies are trying to encash the rivalry to their advantage – in this case Mongolia.
https://sputniknews.com/business/201612191048742827-china-india-mongolia-oil/

Whoever takes the spoils of Petro Matad exploration, the announcement of the scale of the deal – which will no doubt greatly surpass the one which BG pulled out of due to Shell divesting in exploration – will cause great speculation in Wolf"s prospects.

"Back in 2015 their was very little seismic data available at the time. Hence lower oil in place estimates of 100m-128m barrels leading to lower Farm-In price $28m offered for 78% stake by BG at the time. Even in April 2016 when BG had to pull out because of Shell's global divestment mandate, 3D Seismics were in process and had not completed by then. It was only in Nov 2016 when company announced the 90 Billion barrel estimated STOIP after detailed analysis of the 3D seismic data and other high-tech data used. It was only after the PETEX conference presentation that this share came alive. Hence you can easily see the Farm-In price this time around should be multiples of the $28m offered last time by BG. 2017 - Farm-In deal will be much different as this time around the equation is so much different. For starters oil estimate is between 9B - 23 Billion barrels which is almost 150x times (using 16B average estimate) of the previous estimate of 100m-128m barrels"