LONDON (Alliance News) - Shares in Petro Matad Ltd fell on Thursday after the oil explorer said it did not find oil or gas accumulations at its Snow Leopard 1 Well, located in Mongolia.
Shares were trading down 21% at 6.25 pence each.
"No sands were encountered at the shallower of the two primary targets of the well although drilling gases and an oil sheen in the drilling mud were observed across the interval," the company said.
It added: "The gases are believed to be indicative of an active petroleum system in the basin and the oil observed in the mud is suspected to have entered the well from one of the prospect bounding faults which may be acting as a conduit for migrating oil."
However, no oil or gas shows were observed while drilling through the sediments and subsequent logging confirmed them to be water bearing, Petro Matad said.
Chief Executive Officer Mike Buck said: "Whilst Snow Leopard 1 did not find the oil accumulations we had hoped for there are encouraging signs in terms of confirmation of source and reservoir rock development."
Snow Leopard 1 well has been plugged and abandoned by the company due to the disappointing results.
In a separate statement on Thursday, Petro Matad said it appointed Shinezaya Batbold as non-executive director with immediate effect, to replace her mother Oyungerel Janchiv on the board.
Batbold is the chief executive of Petrovis Venture Capital LLC, one of the first local venture capital funds investing into multiple SME sectors in Mongolia.
Petro Matad (MATD)