The AIM-traded firm said the well was being drilled with the Daton Petroleum Engineering and Oilfield Service rig, DXZ1.

It said the Red Deer-1 well was targeting a prospect with 48MMbo of mean prospective recoverable resource, and was planned to be drilled to a total depth of 2,100 metres.

The well was expected to take up to 35 days to complete.

In the event of a discovery, the company said would bring in a separate rig for testing.

A call-off testing contract had been signed, which ensured testing operations, if warranted, could commence soon after discovery.

Meanwhile, at Heron-1, Petro Matad said the first casing point at 551 metres was reached on schedule, and casing had been run and cemented.

The DQE rig 40105 was now ready to drill out cement, and then drill an eight-and-a-half inch hole to the prognosed total depth of 3,050 metres.

However, the provincial government had challenged Petro Matad's legal right to use the land at Heron-1 on the basis that a tripartite agreement between two central government agencies and the province had not been executed.

In all of Petro Matad's operations, the firm said it had followed the land permitting regulations as required under the production sharing contract, and in accordance with instructions from the Ministry of Mining and the industry regulator MRPAM.

The absence of a tripartite land use agreement between government agencies had never previously been an issue.

The board said it was working with the ministry, MRPAM and the provincial government to remedy that situation as soon as possible.

“The rig at Heron-1 has been put on standby whilst the situation is resolved,” the board said in its statement.

“All efforts are currently directed at fixing this interruption as quickly as possible in order to minimise rig standby costs.

“Daily standby costs are low by industry standards and are of the order of $12,000.”

Petro Matad said the Red Deer-1 well was located in a different province to that in which Heron-1 was located, and had not been affected.