Shares in Mongolian oil company Petro Matad Limited (AIM:MATD, OTC:PRTDF, FRA:HA3) fell 19% to 0.98p after PetroChina instructed it to stop delivering crude.
Following the edict, Petro Matad has shut its Heron-1 and Gazelle-1 wells. PetroChina's Mongolian subsidiary said it could not process Petro Matad's invoices while its head office continued internal discussions.
The development follows written assurances from PetroChina in August that it had resolved internal issues over the 2026 oil sales agreement and that exports and sales would begin.
Chief executive Mike Buck said: 'This latest development beggars belief, particularly on the back of the written assurances received last month that all had been resolved.'
PetroChina ordered deliveries to stop because its storage tanks were nearly full ahead of China's national day holidays in early October, when oil imports from Mongolia are suspended.
Petro Matad has escalated the matter to Mongolia's deputy prime minister, who has met PetroChina Mongolia management to seek a resolution.
The company is also discussing alternative routes to market with prospective buyers if the delay to sales of its accumulated crude continues.
Petro Matad said it was managing cash carefully while awaiting 2026 oil sales revenue and had sufficient funds to continue operating into 2027.
