Source: Reuters.com                   Date: 04 August, 2010

Mongolia-focused oil explorer Petro Matad has said that analysis carried out on the drilling results of its first well in Eastern Mongolia confirmed that oil was present, sending its shares soaring. The company last week said that its Davsan-Tolgoi-1 (DT-1) exploration well encountered a 12-meter zone of oil, having said earlier in July that the well had seen oil shows and elevated mud gas as it neared its total depth of 1,220 meters.

"The completion of the wireline testing of DT-1 confirms that good reservoir quality should be expected along the length of the Davsan Tolgoi trend," said chief executive Douglas McGay in a statement. “We are very happy with the initial results from our first well to date, and look forward to the completion of the analysis.”  The DT-1 well was the first of Petro Matad's planned three-well drilling campaign. The rig will now be moved to drill its second well.