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(Alliance News) - Shares in Petro Matad Ltd slumped on Thursday morning after the oil explorer revealed mixed results from recent drilling at Block XX in eastern Mongolia.
The stock was down 29% in London on Thursday morning at 3.00 pence apiece.
Petro, when conducting drilling and logging at operations at the Gazelle-1 well, found no economically recoverable hydrocarbons at the Lower Tsagaantsav target.
The company explained: "The Lower Tsagaantsav reservoir objective was encountered at 2,280 metres, 20 metres deeper than the pre-drill prognosis. The interval penetrated was shale dominated and no hydrocarbon pay was identified on the logs."
In the Upper Tsagaantsav reservoir, Petro said "good wet gas shows" were recorded.
Petro added: "Three metres of net oil pay in good quality sandstone have been defined on the logs."
Casing is now being run at Gazelle-1, which will be suspending as Petro conducts further evaluation.
Turning to the nearby Heron-1 well, the company said testing operations are progressing on schedule. As a result of the Heron-1 testing, Petro Matad is now postponing plans to drill at Block V during 2019.
Chief Executive Mike Buck said: "The results in the Lower Tsagaantsav formation at Gazelle-1 were unexpected in light of the data from other wells in the area.
"However, the absence of sands in the Lower Tsagaantsav and the presence of a thin, but good quality pay zone in the Upper Tsagaantsav reservoir support the case for potentially significantly sized stratigraphic traps at the southern end of the Tamsag Basin within Block XX. This will be a focus of the post-well evaluation which will commence shortly, once the testing operations on Heron-1 are complete."
By Eric Cunha; ericcunha@alliancenews.com
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