Petro Matad (LSE:MATD) was down 45% this morning on news of another failed drill in Mongolia. The Wild Horse 1 well was drilled to a total depth of 1,490 metres with no oil show observed. The well is in Block IV and provides the first tie to the seismic database concerning the block. The seismic will now be reinterpreted to better understand the basement and basin configurations.
The Wild Horse 1 well will now be plugged and abandoned and a post well evaluation will begin. This will focus 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 on this initial analysis. Also, information from Wild Horse 1 can be compared with the proven productive basins to the south in northern China to help determine the next steps in exploring the area.
The rig and crew have operated well through the onset of winter in Mongolia and the 2018 drilling campaign in Blocks IV and V has been completed within budget.
The post-well evaluation of the Snow Leopard 1 well in Block V is progressing. The well provided good evidence of a working petroleum system in the Taats Basin and as a result a group of prospects on the southern flank of the basin which have significant resource potential have been ‘high-graded’ and are potential candidates for drilling next year. Drilling operations will include Block XX in the east of Mongolia, adjacent to the country’s producing oil fields. Petro Matad reports preparations in Block XX are well advanced and will focus on near field and appraisal targets.
As shareholders dust themselves off, it’s worth noting that the Company’s current cash balance is more than $25 million and the company states it is fully funded for its 2019 drilling programme.
Mike Buck, CEO Petro Matad said:
“The Wild Horse 1 result is clearly disappointing but this was too big a structure to leave undrilled. 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.
As we are fully-funded for the 2019 drilling programme, we are now in the process of identifying our priority targets. In Block V, our post-well analysis has highlighted three, four-way dip closed structures with large resource potential which we are working up to drillable status and we are also using Snow Leopard 1 data to calibrate the prospectivity in the neighbouring Tugrug Basin, including the high-graded Fox prospect.”