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Petro Matad reveals Red Deer exploration well is ‘dry’

Attention quickly switches to the upcoming of the Heron well testing programme and the planned Gazelle drill programme.

Petro Matad Limited - Petro Matad reveals Red Deer exploration well is ‘dry’
Red Deer was 'on budget' costing less than US$4mln

Petro Matad Limited (LON:MATD) has revealed that the Red Deer 1 exploration well has failed to find hydrocarbons.

The Mongolia focussed explorer, in a statement, said that the well was drilled down to 2,000 metres and no hydrocarbon bearing zones were identified. Red Deer 1 will now be plugged and abandoned.

It did encounter the primary reservoir target, the Lower Tsagaantsav, slightly shallower than anticipated but no oil shows were present. Similarly, it observed indicators of potential source rocks but it was concluded that they were not mature in the vicinity of Red Deer.

Red Deer 1 was drilled on budget and cost less than US$4mln, Petro Matad said.

"While the results of the Red Deer-1 well are disappointing, it was the first well to be drilled in any of the basins located in the south of Block XX and it therefore carried a lower chance of success than the wells in the north,” said Mike Buck, chief executive.

He added: The company's activities are now focussed on drilling and testing operations in the north of Block XX and we look forward to updating the market further on the spudding of Gazelle-1 and the testing on Heron-1."

Petro Matad updated on the Heron 1 well which has now been cased ready for a testing programme, due to start in early October. Well results released last week included the presence of oil and gas shows, with a 77 metre gross reservoir interval interpreted from drilling data.

The upcoming testing will provide further information about the potential discovery.

At the same time, the drill rig will now move from Heron to the Gazelle exploration well location, where drilling operations are slated to start before the end of September.

Quick facts: Petro Matad Limited

Price: 3.4 GBX

Market: AIM
Market Cap: £22.79 m

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