Key points:
- The Petro Matad share price plunged 10.5% on its full-year results.
- MATD shares fell despite the oil firm’s positive annual results for 2021.
- Today’s decline was mainly driven by negative investor sentiment.
The Petro Matad Limited (LON: MATD) share price plunged 10.5% after releasing its financial results for the year to December 31, 2021. The company has operations in Mongolia, exploring oil, and it made significant progress last year.
However, its operations were impacted significantly by factors outside its control, such as the closure of land borders with China, which impeded the flow of personnel into its Mongolian sites. Still, the firm reported some progress during the year as it got approval for the development plans of its Heron discovery along with the Exploitation Licence for Block XX.
Also read: Best Oil Stocks To Buy Right Now.
Petro Matad also agreed with the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) to export its crude oil via the nearby PetroChina processing and export facilities until Mongolia’s domestic refineries start operations in a few years.
The company also noted that the 2021 moratorium on Block V was extended to June 2023, giving it adequate time to explore further drilling opportunities within its acreage and to secure exploitation licences on any findings made.
The oil firm found it difficult to continue operating in 2021 due to the multiple lockdowns in Mongolia and China, but some restrictions were eased towards the end of the year, allowing it to do more. However, international travel was still challenging, primarily due to the closure of the land border with China.
Petro Matad had net cash worth $8.2 million at the end of December 2021 compared to $1 million at the end of 2020. As a result, the oil company’s net loss after tax for the year was $2.1 million versus the $3.2 million loss recorded in 2020.
So, should you buy Petro Matad shares? Today’s plunge has left MATD shares trading at a long-term support level. I expect this level to hold in the coming days creating an excellent buying opportunity. A break and close below this level would invalidate the bullish thesis.
*This is not investment advice. Always do your due diligence before making investment decisions.
Petro Matad share price.
The Petro Matad share price fell 10.52% to trade at 2.55p, from Friday’s closing price of 2.85p.