Bergen Asset Management is providing the cash through a staged private placing, in up to 15 separate tranches, as well as a US$2mln convertible loan note (over 24 months and interest free).

The cash is earmarked for the drilling of at least two new exploration wells, described as ‘basin opener wildcats’. Petro Matad also plans to shoot new 3D seismic.

Drilling is due to start in Mongolia this year. Further drill plans for 2018 will depend on the results of this year’s campaign.

“This funding secures our firm work programme for 2017 and 2018 comprising 4 exploration wells and up to 300 km2 of 3D seismic acquisition,” said Ridvan Karpuz, Petro Matad chief executive.

“The Bergen facility is extremely flexible and allows us to effectively manage our cash resources over the next 18 months during a very active operational period for the company.

“We will continue to pursue other investment options that could allow us to either expand our work programme in the event of encouragement with the drilling programme, or alternately reduce the funding required from the Bergen facility.

“In particular, we are in active dialogue with a number of interested parties who are evaluating the farm-out and remain hopeful of concluding an agreement with a farminee prior to the commencement of the first well."

Petro Matad noted that Bergen is making a passive investment, it will not receive any seats on the company’s board.