Petro Matad shares down 44% after disappointing drilling results
Shares of Mongolian oil explorer Petro Matad Ltd dropped 44 percent on Monday, following its failed attempts to find oil at Wild Horse 1 well, located in block IV of the Baatsagaan basin in southern Mongolia.
Petro Matad shares were trading down at 2.86 pence each on Monday, according to Alliance News.
A summary of results from Wild Horse 1 well provided by Petro Matad reported that the company drilled block IV to the total depth of 1,490 meters in granitic basement.
“In line with the pre-drill prognosis, the well encountered interbedded sands and shales throughout the prospective section, but no oil shows were observed,” the report read. “Post-well analyses will focus initially on determining the ages of the formations drilled and the reservoir and source rock potential. Further work on the surrounding prospectivity in the Baatsagaan Basin will depend upon the source rock potential and maturity that can be determined from these analyses.”
Elsewhere in the block IV, Petro Matad said a number of other basins have been evaluated and the information secured from Wild Horse 1 well will help determine the next steps in exploring the area.
“The Wild Horse 1 result is clearly disappointing but this was too big a structure to leave undrilled,” said Chief Executive Mike Buck.
“We will use the data gathered to re-evaluate the Baatsagaan basin and to look again at the prospectively in the other basins in block IV,” added Buck.
Turning to the block V, the company said the post-well evaluation of the Snow Leopard 1 well showed significant resource potential, which will be worked up as potential candidates for 2019 drilling program.
The current cash balance of Petro Matad is said to be more than 25 million USD and will be used to fund the 2019 drilling program.
The oil explorer said that for the block XX, it received a number of bids from contractors wishing to supply the rig and drilling services for its 2019 drilling campaign.
Petro Matad intends to complete contractual negotiations “as soon as possible” and prepare for the commencement of drilling in 2019 when the weather permits.