Mongolia, a nation known for its vast yet largely untapped natural reserves, has earned yet another interested miner from Australia for its oil and natural gas supplies.

ASX-listed minerals explorer Strzelecki Metals, in a report by Deal Journal Australia, has been reported to be eyeing unlisted Wolf Petroleum for a takeover bid. The latter has the entitlements to search the Mongolian steppe for oil and natural gas.

Existing shareholders of Wolf Petroleum, under the deal's terms, will be accorded 25 Strzelecki shares for every one Wolf share.

Wolf Petroleum was supposed to conduct an initial public offering in 2013, but scrapped it all together upon the advice of Perth-based Garrison Capital, its advisor. The mining firm is considered as Mongolia's biggest oil tenement holder, holding more than 80,000 square kilometres. It has been conducting seismic studies since 2011 to pinpoint the best targets. Plans to commence a drilling campaign have been arranged for next year.

Brian McMaster, chairman of Strzelecki Metals, said the IPO withdrawal and eventual support for a backdoor listing does not have any relation to the Australian equity market's sudden downward spiral.

"It is substantially to do with accelerating Wolf's exploration program, which is ahead of schedule," Mr McMaster said.

Should shareholders approve to the arrangement, Strzelecki restart trading in November under the new entity Wolf Petroleum. The two companies' merger will have a market value estimated at around A$50 million (US$51.1 million).

According to estimates by the federal government, Mongolia holds some 10.7 billion barrels of crude oil-in-place in more than 30 blocks.