Shares in Petro Matad Limited (AIM:MATD, OTC:PRTDF) slipped 11% to 1.4p after the Mongolia-focused oil producer reported mixed operational news, with a new well starting production but continued challenges at another site.
The AIM-quoted explorer said its Gazelle-1 well, tested in October, has been brought online at an initial rate of around 200 barrels of oil per day.
Early shipments have been delivered to PetroChina under an existing sales agreement, and the company is monitoring performance to see if output can be increased.
However, progress at the Heron-2 well has been slower than hoped. After early signs of oil recovery, flow rates dropped due to a possible downhole issue or perforation blockage.
Pumping operations have resumed, but if output does not improve, the well will be shut in for the winter.
Heron-1, which has now been producing for a year, continues to perform steadily with total output close to 60,000 barrels and a low water cut of about 3%.
Petro Matad is also renegotiating payment terms with PetroChina to ensure full and timely settlement for exported crude.
Chief executive Mike Buck said production growth and cash generation remain the focus as the company works through operational and contractual hurdles.