Ivanhoe Energy has announced “positive indicators” for the presence of oil after the company finished drilling its second exploration well on the Nyalga block in east-central Mongolia. The well is set to be completed and begin testing early next year.

“Oil staining, fluorescence and increases in background gas were observed in several sand sections, which are positive indicators of the presence of oil,” said Gerry Moench, Ivanhoe’s executive vice president. “The log results will be reviewed and analyzed to provide guidance on the best approach to completing the well once weather conditions permit.”

The well, known as N16-2E-B, was drilled on an eight-square-kilometer structure approximately 12 kilometers from a first well drilled earlier this year. Like the first well, the second well has provided vital information that will be used to help guide the ongoing drilling program.

“We look forward to testing the well and to beginning the next phase of exploration in Mongolia, including further seismic and drilling,” said Ivanhoe President and CEO David Dyck.

“Mongolia is in the early days of oil exploration. Since it does not have the oil field operations infrastructure to enable continued operation through the harsh winter months, we will take time during the winter to correlate data and determine the best way to proceed,” Dyck said.