Petro Matad's loss almost doubles on higher exploration costs

Mongolia-focused oil explorer Petro Matad on Monday reported that its annual loss almost doubled, though the drilling of two exploration wells was completed on schedule and within budget.

The AIM traded company's loss before tax came in at £18.4m for 2018, an increase of 86% compared to the year before, as exploration and evaluation expenditure jumped from £4.4m to £11.5m as Petro Matad drilled two exploration wells, Snow Leopard 1 and Wild Horse 1, in the previously undrilled Valley of the Lakes in central western Mongolia.

Meanwhile, interest income, the company's only current source of revenue, increased by 181% to £0.6m.

Petro Matad said three wells would be drilled in Block XX in 2019, with Heron 1 and Red Deer 1 expected to spud in July and Gazelle 1 to follow the drilling of Heron 1.

Analysts at Shore Capital said the "very exciting" planned three well programme was proceeding in line with their expectations and described the oiler's cash position of $16.6m as "robust".

Petro Matad's shares were up 2.36% at 7.60p at 1015 BST.