Petro Matad shares down 44% af­ter dis­ap­point­ing drilling re­sults

The UB Post - - Business & Economics -

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.

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