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LONDON (Alliance News) - Petro Matad Ltd on Monday said no oil shows were observed in the Wild Horse 1 well, located in block IV of the Baatsagaan basin, southern Mongolia.
Petro Matad shares were trading down 44% on Monday at 2.86 pence each.
The oil explorer said it drilled block IV to the total depth of 1,490 metres 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, Petro Matad said.
Post-well analyses will focus initially on determining the ages of the formations drilled and the reservoir and source rock potential.
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 prospectivity 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 programme.
Petro Matad said its current cash balance is more than USD25 million and it is fully funded for the 2019 drilling programme.
Meanwhile, in the block XX, the company said 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.
