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Investors in Mongolian oil explorer Petro Matad (LON:MATD) are licking their wounds after the shares plummeted on news of a dry well. The Wild Horse 1 well, located in the Baatsagaan Basin within the company’s Block IV, was drilled to a total depth of 1,490 metres but found no oil. It will now be plugged and abandoned. CEO Mike Buck said: “The Wild Horse 1 result is clearly disappointing but this was too big a structure to leave undrilled.”
Wild Horse 1 provides the first well tie to the seismic database in Block IV and the seismic will now be reinterpreted to better understand the basement and basin configurations. Elsewhere in Block IV, a number of other basins have been evaluated and the information provided by Wild Horse 1, particularly in terms of the ages of the formations present and their correlation with the proven productive basins to the south in northern China, will help determine the next steps in exploring the area.
Petro Matad added that the 2018 drilling programme in Blocks IV and V has been completed within budget. Current cash balances are more than $25 million, leaving the company fully funded for its 2019 drilling programme. As of 12:30 GMT the shares had fallen by 44% to 2.85p.