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LONDON (Alliance News) - Petro Matad Ltd shares fell on Wednesday after the company said it had suspended its seismic data acquisition at its project in Mongolia and said its drilling plans for the site have been pushed back.
Petro Matad said it has completed its seismic data acquisition for Block IV at the project, but will now postpone collecting data for Block V and will start again in May.
Due to that delay, it now plans to start drilling two exploration wells at the project in 2017, rather than in 2016, as had been previously planned.
Shares dropped 20% to 2.5 pence on the news, the worst performer in the AIM All-Share.
Petro Matad said it remained confident in the project and said drilling the two wells back-to-back in 2017 will result in operational efficiencies for the business. It also said the availability of drilling rigs, amid the slowdown in activity in the oil and gas industry following the oil price plunge, makes it likely it will be able to secure drilling rigs for the project at a lower cost than had previously been envisaged.
The company said the collapse in the oil price had not hit its operations overall, and it remains confident on the Mongolia project.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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