Petro Matad raises $16m in share placing to fund drilling campaign

AIM-listed Mongolian oil explorer Petro Matad has raised $16m through the placing of around 59.2m shares at 6.5p each.

The company said the fundraising will alow it to relaunch its exploration programme and appraisal activities in Mongolia, led by industry veteran Mike Buck as chief executive, following his appointment last October.

The net proceeds will be used to fund up to four new wells as part of a drilling campaign across the group's acreage position. This will consist of up to two wells in Blocks IV and V in Western Mongolia and two wells in Block XX, immediately adjacent to the producing Block XIX.

The 2018 drilling campaign is planned to target a combined estimated prospective resource of 398mmbo with an expected combined drilling cost of $15.5m.

Mike Buck said: "I am pleased to announce the completion of this significant, oversubscribed fundraise; through the support of new and existing shareholders we are targeting a substantial and unprecedented exploration campaign for an independent E&P company in Mongolia.

"We are uniquely placed in Mongolia; with an extensive acreage position and large resource range and with the access to a suitable rig, the 2018 drilling campaign will allow us to unlock the prospectivity in a timely and economic fashion, providing near term catalysts and longer term value.

"This is a very exciting time for Petro Matad and in my experience, opportunities of this magnitude are rare and with the support of the market we are focussed on delineating the significant potential contained within our portfolio."

At 1245 GMT, the shares were down 16% to 7.64p.