Petro Matad Ltd (PK) (PRTDF) Share Price

Petro Matad

Petro Matad has provided the following update on the planned start of oil production in its Block XX Production Sharing Contract area in eastern Mongolia.

Highlights

· Construction and equipment installation activities at the Heron-1 well pad have been completed and commissioning of the site is ongoing. Start of production from the well is planned on or before 25 October 2024.

· The Company will host a delegation headed by the Ministry of Industry and Mineral Resources for a production startup ceremony at site on 25 October.

· The Cooperation Agreement with PetroChina Daqing Tamsag for use of the Block XIX production facilities and export infrastructure is in near final form.

Heron-1 production startup

Site construction and equipment installation activities on the Heron-1 well pad have been completed. The beam pump, generator and storage tanks are now being commissioned and will be ready for production startup on or before 25 October 2024. Petro Matad’s in-field operations team is at site and all logistical preparations are being made to be ready to start the transportation of produced fluids to PetroChina’s facilities some 20 km to the north in Block XIX.

The Company will be honoured to host a delegation headed by the Ministry of Industry and Mineral Resources at a startup ceremony at the well site on 25 October. The delegation will include senior representatives of the Ministry, senior officials of industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), and invitees also include the Provincial and District Governors and their respective senior officials as well as representatives of PetroChina.

The Cooperation Agreement with neighbouring operator, PetroChina Daqing Tamsag, is in near final form. It includes provision for the offloading, measurement, processing, export and sale of the Block XX production. All fees to be levied are in line with expectations and the only item remaining to be agreed is the administration fee to be paid to PetroChina. Whilst PetroChina has advised that it will likely take some time for the agreement to be signed by its Headquarters, Petro Matad, PetroChina and MRPAM have all agreed to get Block XX production operations started ahead of the operational winter shut down in late November. Production, processing and export activities continue through the winter months, so it is important to get these started in advance.

Mike Buck, CEO of Petro Matad, said:

“We have waited a long time to get the Heron-1 well into production and we are pleased to have reached this important milestone. We very much appreciate the support of the Ministry and MRPAM and the cooperation that PetroChina is providing. We are also very grateful for the hard work and enthusiasm of our dedicated team and for the patience and continued support of our shareholders.”

Further operational updates will be provided in due course.

It takes someone like Mike Buck to say that ‘we have waited a long time to get Heron-1 into production’ and so it seems. Younger analysts and sector followers know more about Genghis Khan than oil from Mongolia but all that is about to change. All I can say is many congratulations to Mike and his team for getting over the line, it couldn’t happen to a nicer bloke.

Petro Matad Limited (AIM: MATD), the AIM quoted Mongolian oil company, provides the following operational update on activities in its Block XX Production Sharing Contract area in eastern Mongolia.



Highlights

· The Ministry of Industry and Mineral Resources (MIMR) and the Ministry of Construction and Urban Development (MCUD) have approved the Company's proposal to reclassify oil production well pads such that they do not require construction permitting. MIMR has issued instructions to the Company to start production. Construction of long-term production facilities at Heron-1 has commenced and production startup during October is expected.

· Commercial details for the cooperation agreement between the Company and the operator of Block XIX facilities have been provided and are in line with expectations. As soon as the agreement is in final form it will be shared with industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) for approval.

· Preparations to test the Heron-2 well are underway with results expected in early November. Now that construction permitting is not required, the Company is progressing plans to be ready to bring the well onstream in November in the event of a good test.

· The Gobi Bear-1 exploration well has been drilled and logged. Casing has now been run to bottom and the well will be suspended pending further evaluation prior to likely well testing.



Heron-1 construction operations and production startup

Whilst mobilising to put temporary facilities on the Heron-1 well pad in order to start production and avoid further delays in the construction permitting procedure, the Company was delighted to be informed by MIMR that its proposed reclassification of oil production well pads had been approved. MIMR also issued instruction to Petro Matad to start oil production operations. The contractor, DQE Construction, is now installing the long-term production facilities with the expectation that these will be ready for production startup from Heron-1 within the month of October.

The cooperation agreement with the operator of Block XIX is progressing well and commercial terms are near final. They are in line with our expectation and understanding of the costs of the ongoing transport, processing and export operations. MRPAM has been kept informed of the negotiations and is standing by to review the agreement once it is in final form.

Heron-2 well testing

The drilling rig will be stored for the winter by contractor DQE Drilling at the Heron-2 location, making it readily available for any 2025 drilling activities the Company may decide to perform. The equipment is being stacked to avoid any impact on testing and subsequent construction operations. Well test contractor, DQE Testing, will mobilise to site once the rig is clear of the well head. Petro Matad is finalising the test programme and will perform a reservoir stimulation operation on Heron-2 prior to the well test with a view to completing the well for production provided a commercial flow rate is achieved.

Now that the lengthy construction permitting process is no longer required the chances of getting Heron-2 on stream this year have improved, and plans are being made to be ready to do so in the event of a positive well test. Suppliers of the necessary equipment have been contacted and discussions are also ongoing with the Block XIX operator with a view to borrowing spare equipment that may be available locally. The Heron-2 stimulation and testing operation is now forecast to be complete in early November, giving a short window in which to put the well on production before operational activity is suspended for the winter.



Gobi Bear-1 drilling results

The Gobi Bear-1 exploration well located in the southern part of Block XX in the Tamsag Basin has been drilled a total depth (TD) of 1,805m and wireline logging has been completed. The primary objective Lower Tsagaantsav Formation was penetrated at 1,425m and good sand development was seen. Basement was encountered at 1,741m. Drilling gas shows were seen throughout the Tsagaantsav formation and faint oil shows were also observed. Wireline logging confirmed a total of 34m of reservoir quality sandstones within a gross interval of 70m between 1,558m and 1,628m. From logs, the sands are computed to have 13% average porosity which is consistent with the productive reservoirs in the basin. Detailed log interpretation has been conducted and the resistivity profile suggests the sands may contain a hydrocarbon charge but the absence of good oil shows whilst drilling leads to some uncertainty. Without better knowledge of rock properties, water salinity and temperature at this depth, reservoir fluid determination from cuttings and logs in this well is not definitive.

In light of the ambiguous results from drilling and logging, the well has been cased to bottom and will be suspended whilst the Company gathers relevant information from well samples and regional data in the Tamsag Basin in order to refine the interpretation. The Company will then determine the forward programme, which is anticipated to involve a well test, likely being the best way to definitively determine the fluid content of the reservoirs in Gobi Bear-1.



Mike Buck, CEO of Petro Matad, said:

"The last few weeks have seen a lot of activity and some significant progress. We are extremely grateful to the recently appointed Ministers of Mining and Construction for their support in reclassifying oil production well pads to avoid the unnecessary burden of construction permitting regulations that were not designed for works of this kind. Our focus continues to be getting Heron-1 on stream as soon as possible and hopefully Heron-2 can also be brought onstream during the 2024 operational season.

The Gobi Bear-1 result is a teaser but if oil is present in these well-developed reservoirs at such easily and cheaply drillable depth that could be a very significant result for the Company. As such, suspending the well allows us to gather data to refine our understanding and determine how best to get a definitive answer."

Further operational updates will be provided in due course.

Petro Matad has announced that Heron-2, the first development well to be drilled on the Petro Matad operated Heron Oil Field in Block XX in the Tamsag Basin of eastern Mongolia, has reached TD and wireline logging has been completed.

Highlights

· Heron-2 reached a total depth (TD) of 2,908m seven days ahead of schedule.

· An oil zone of 18m gross thickness was encountered which wireline logging indicates is very likely the same stratigraphic unit as that successfully tested in the Heron-1 discovery well.

· Production casing has been run in preparation for a well testing programme.

Drilling and logging results

The Heron-2 well reached TD seven days ahead of schedule following a smooth drilling operation with no safety or environmental issues. It encountered the primary target Cretaceous Lower Tsagaantsav Formation on prognosis. Oil and gas shows were observed from the top of the formation and an 18m thick interval of sandstone was penetrated in a similar stratigraphic position to the sandstone in Heron-1 that flowed good oil rates on well test. This interval was encountered at a depth of 2816m in Heron-2, 16m shallower than in the Heron-1 well and drilling mud was lost to the formation at the top of the unit, as it was in Heron-1, indicating a zone with good permeability.

Petrophysical evaluation of the wireline logs indicates that oil is present to the base of the sand and there is net oil pay within it of more than 5 metres. Log correlation indicates that this sandstone is very likely to be the same stratigraphic unit as the one tested successfully in Heron-1. It also has similar log calculated porosity.

Casing has been run to TD and preparations are being made for a well testing and stimulation programme over the pay zone with the ambition, in the event of successfully achieving a commercial flow rate, to put the well on stream as soon as possible. Recent heavy rains in the area have caused some logistical difficulties but the Company remains focused on getting the testing programme completed expeditiously and, based on the results, will then determine if time and weather will permit getting the well on production before the 2024 winter operational shut down in late November. The well test operations are expected to be completed during the month of October.

Mike Buck, CEO of Petro Matad, said:

“We are encouraged by the results of Heron-2 so far. Reservoir variability is one of the main uncertainties in the Tamsag Basin, so to have found what looks very much like the same unit in Heron-2 that proved productive in the Heron-1 discovery well is pleasing. Testing operations will determine the well deliverability and the forward programme thereafter. We are keen to maintain the momentum generated in the last few months.”

This looks like good news but it’s all down to the testing which should be positive given the similarities to the 1 well, lets hope for the best result…

Petro Matad
Petro Matad has provided the following operational update on the Heron-1 oil discovery well and anticipated oil production start-up.

· Petro Matad has proposed that Heron-1 will be put onstream through temporary facilities so that production is not further delayed by slow moving bureaucracy.

· Mineral Resources and Petroleum Authority of Mongolia (MRPAM) has formally agreed to this proposal, with production start-up on Heron-1 now anticipated during October.

Heron-1 well pad – surface facilities

As previously reported, the application for the construction permit to install the long-term production facilities at Heron-1, which could only be initiated after land access had been approved in late May, had reached the final stage and the permit is with the provincial Governor for the final signature required. The Governor is new in-post, having been formally appointed in early September, and has told the Company that he needs time to review the application. In light of this, and with no indication of how long this review will take, Petro Matad has proposed, and industry regulator MRPAM has formally agreed, that Heron-1 will be put onstream through temporary facilities so that production is not further delayed by slow moving bureaucracy. The temporary facilities will be positioned on the well site to allow construction of the long-term facilities to go ahead in parallel with production operations once the construction permit has been obtained. The Company has given notice to its chosen contractor to install the temporary facilities and the work is anticipated to be completed within two to three weeks.

Oil sales

Following the high level meeting held at the Block XIX facilities some 20km north of the Heron-1 well, agreement in principle has been reached between Petro Matad and the Block XIX operator for the collection, metering, processing, storage, export and sale of Block XX production. The details are now being incorporated into a cooperation agreement which will then be presented to MRPAM for its approval. The parties have committed to try to have the agreement in place in time for production start-up on Heron-1 which is now anticipated to be during October.

Mike Buck, CEO of Petro Matad, said:

“The further hold up of the construction permit at the final step of an unnecessarily complex process is unwelcome, but we are very pleased that we have the support of MRPAM to use temporary facilities to expedite production. We do not anticipate any significant facility cost increase as a result of this solution and we will closely manage the construction activities when they start, to allow construction and production operations to continue simultaneously.

The meeting in Block XIX was very productive and the operator’s willingness to cooperate with the Company is much appreciated. We look forward to completing the drafting of the cooperation agreement and to securing MRPAM’s approval within the next few weeks.

Meanwhile, Heron 2 drilling operations are proceeding smoothly. With Gobi Bear-1 soon to spud, these are busy and exciting times for the Petro Matad team.”

Further updates will be provided as the 2024 work programme progresses.

Quite when Mike Buck is going to be able to report some news without a caveat that it hasn’t been approved is hard to see, I have to give him full marks for continuing to deliver at least something in such desperate local conditions. The good news that the authorities are facilitating the temporary production is a big plus and I wish him well. The shares have understandably underperformed this year but actually it might have been worse and with a following wind things might be looking up. But don’t expect that wind to be very strong, around here things are very slow or stop.

Petro Matad has provided the following operational update.

(Thanks to Malcy's Blog 09/09/24)

Spud of the Heron-2 Development Well

Petro Matad is pleased to announce that on 8th September it spudded the Heron-2 development well in the Tamsag Basin of eastern Mongolia. This is the first development well to be drilled on the Petro Matad operated Heron Field, which has total oil in place potential of c. 190 million barrels and which was discovered when the Heron-1 well was drilled and tested in 2019.

Heron-2 is being drilled by the DQE International rig 40106 and is located c. 800m south of the original Heron discovery well. It is targeting the same reservoir units of the Cretaceous Lower Tsagaantsav Formation that were proven productive in Heron-1. Heron-1 flowed at a maximum rate of 821 barrels of oil per day on test from a 12m interval between 2,834m and 2,846m in an overall oil column of some 70m. This was the third best test rate ever recorded in Mongolia. Heron-2 has been located to investigate the extension of the productive reservoir zone seen in the discovery well and will be drilled to a total depth (TD) of c. 2,900m. The reservoir is expected to be encountered at a similar depth to that in Heron-1 based on interpretation of the high quality 3D seismic data covering this portion of the Heron structure.

Drilling to TD is expected to take about 30 days following which wireline logging will be conducted to evaluate the productive potential of the reservoir. A well test and stimulation programme are planned to be executed during the 2024 operational season. If successful, Heron-2 will be put on stream in either late 2024, if time permits, or in Q2 2025 after the winter operational shut down.

Gobi Bear-1 Well Preparations

Mobilisation activities for the Gobi Bear-1 exploration well are underway with anticipated spud by mid-September. A separate update will be issued in due course.

Heron-1 surface equipment installation and preparations for production

The construction permit for the installation of production facilities at Heron-1 is at the final stage of the approval process. The construction contractor is ready to mobilise. The paperwork for the construction permit for Heron-2 is also being progressed whilst, in parallel, the Company has proposed a streamlined approval process to the Ministry of Construction to reduce the bureaucracy for the construction of oil production well pads.

Negotiations with PetroChina and industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), on processing, transport and sales of Block XX production are progressing and Petro Matad has been invited by PetroChina to meet at its Block XIX facilities to review the logistical options.

Mike Buck, CEO of Petro Matad, said:

“After a lot of effort from our staff and considerable patience from our shareholders, we are very pleased to have spudded the Heron-2 development well and we look forward to Gobi Bear-1 following soon. We are encouraged by the progress of discussions on cooperation with PetroChina and we are pushing for the final approval on the Heron-1 construction permit which we don’t expect to take much longer.”

Further updates will be provided as the 2024 work programme progresses.

So, MATD spudded the Heron-2 development well yesterday, the field has c.190m barrels discovered on Heron-1 back in 2019, things don’t travel quickly in Mongolia. At that stage the well flowed 821 b/d and this 2 well is investigating the extension of the original reservoir zone, it should take around 30 days plus logging.

They are mobilising for the Gobi Bear-1 well and preparations are underway and all being well will spud in Mid September. Away from that the Heron-1 production site is awaiting its construction permit as is Heron-2 in parallel to try and save time.

It is really good to see things happening at Petro Matad but even now progress remains painfully slow and with the added inconvenience of the winter shutdown we may have to wait until next year to see significant progress, particularly at Heron. Having said that the management has stuck in there, the shareholders have indeed been very patient and next year should be one to enjoy.

Thanks for posting plumo

Commencement of Heron-1 Completion Operations

Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil company, is pleased to announce that completion operations on its Heron-1 oil discovery commenced on 22 July.

The contractor, PetroChina's well completion subsidiary DQE, has mobilised to site along with Petro Matad's team and is preparing to re-enter the well. The work planned involves a reservoir stimulation operation to enhance near wellbore drainage and the installation of the downhole production equipment. These operations are expected to be completed by mid-August.

When the well completion operations are finished, the wellsite will be prepared for the installation of surface production equipment and this work is expected to start during August. Once the surface equipment has been connected to the Heron-1 well and commissioned, the well will be ready for production start-up.

Meetings are scheduled before the end of July with the industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), and with PetroChina's in-country management team to finalize details of the cooperation agreements required to allow Petro Matad to access PetroChina's oil processing facilities, transport and oil sales infrastructure.

Further updates will be provided as the 2024 work programme progresses.

Petro Matad


(Thanks to Malcy's blog)

LONDON, 10 July 2024: Petro Matad Limited, the AIM quoted Mongolian oil company announced on 5 July 2024 that Mike Buck, Chief Executive Officer, and members of the Company’s management team will make an Investor Presentation on the Investor Meet Company platform today at 10:30 BST.

The Investor Presentation will go into further details on the 2024/2025 work programme, following the recent Placing, Subscription and Open Offer. The Presentation will be made available on the Company’s website.

As announced on 29 May 2024, the Company has received the remaining approvals necessary from Matad District to allow the 2024 operational programme to commence. Land certificates have been issued for the three areas of operation selected by the Company.

The overall goals of the 2024/2025 work programme are to:

· Commence production and development of the Heron discovery in Block XX

o Heron-1: Re-perforation, stimulation and completion scheduled for July, installation of surface equipment and targeting the well to be put on production in late Q3 2024

o Heron-2: Drill & complete in late Q3, installation of equipment and targeting the well to be put on production in Q4 2024

· Undertake near field low-cost exploration drilling

o Planning to drill the high-impact Gobi Bear-1 exploration well in late Q3/early Q4, depending on rig availability

· Develop renewable energy projects to bankable, ready to build status

o Choir 50MW battery energy storage system targeting ready-to-build in early 2025

o OT Green Hydrogen, targeting phase 1 onstream in 2025

· Achieve self-sustainability and deploy oil production revenue on development drilling, near-field exploration, new PSCs and developing renewable energy projects

o Targeting the signature of two new PSCs in late 2024/early 2025

Mike Buck, CEO of Petro Matad, said:

“With land access permits in hand and following the recent equity raise we are now gearing up for a busy operational period. Members of the management team look forward to presenting to shareholders on the Investor Meet Company platform and will outline the upcoming work programme including our plans for SunSteppe Renewable Energy and the expected award of two new Production Sharing Contracts.”

Further operational updates will be provided in due course.

Just a bit of advertising for Petro Matad and Mike Buck, its worth listening when he talks and the presentation will add value.

Thanks to Oilman Jim letter

June 26, 2024

Petro Matad (MATD.L PRTDF HA3.F) announced a proposed capital raising of up to $8.5 million gross by way of a placing and a subscription by a director and shareholder for new shares at a price of 2p per share. A separate offer to raise a further c.$0.5 million before expenses will provide existing retail shareholders in the UK with an opportunity to participate. The net proceeds of the capital raising will primarily be used to complete and put Heron-1 on production, drill, complete Heron-2 and put on production, drill the Gobi-Bear 1 exploration well and develop renewable energy projects. Mike Buck, Chief Executive, has indicated his intention to subscribe for new shares representing approximately $100,000 at the placing price pursuant to the subscription. Petrovis, the company's largest shareholder, has indicated its intention to subscribe for new shares representing approximately $1 million, again at the placing price pursuant to the subscription.

Mike Buck, CEO of Petro Matad, said:

"This capital raise will allow Petro Matad to commence the development of the Heron oil discovery with the goal of generating sufficient production revenue to cover the operating costs of the company and to accumulate cash to allow for the drilling of future appraisal and development wells to increase proven reserves and production. The raise also includes funds to drill the low cost, high impact Gobi-Bear 1 exploration prospect at the southern end of the prolific Tosun Uul sub-basin. The prospect has estimated recoverable resource potential of circa 100 million barrels close to the Heron field.

In addition, with Petro Matad's SunSteppe Renewable Energy joint venture already having secured two development projects, a number of new opportunities are being worked up and ranked to prioritise the most attractive near term targets. The raise includes a small amount of extra development funding to bring the high-graded projects to internationally bankable, build ready status.

Petro Matad expects to sign two new Production Sharing Contracts with the government of Mongolia later in 2024 or early in 2025, and the company is keen to advance these projects in parallel with its existing business.

We are pleased to have been able to access the funding needed to kickstart development operations and to offer participation in the raise to existing shareholders through the Bookbuild platform."

The Placing is subject to the terms and conditions set out in the Appendix to this Announcement (which forms part of this Announcement). It is intended that the Retail Shares will be subscribed for on the basis of the terms and conditions of the Retail Offer, rather than pursuant to the terms and conditions of the Placing contained in the Appendix to this Announcement

Petro Matad

(Thanks to Marcy's blog 6/19/24)

Petro Matad has announced its audited final results for the year ended 31 December 2023. All monetary values are expressed in United States dollars unless otherwise stated.

2023 Operational Highlights

· The Company continued to push the Mongolian government and authorities to register Block XX Exploitation Area as State Special Purpose land and secured Cabinet approval for the certification in July. Continued bureaucratic delays in the government’s regulatory processes to complete the certification led the Company to seek local level approvals in parallel.

· The Company raised $6.6 million to finance exploration drilling in Block V and its renewable energy joint venture focused on projects in Mongolia.

· The Velociraptor-1 wildcat well was drilled in Block V in mid-2023. Although the well was plugged and abandoned as a dry hole, it penetrated good quality reservoirs and source rocks and provides an excellent data point to high-grade other exploration areas in Mongolia. The operation also demonstrated that very low-cost exploration drilling can be done in-country with truck mounted equipment and a very small environmental footprint.

· Close cooperation and community support in Block V demonstrated that the Company’s community outreach is fit for purpose.

· Petro Matad was chosen as the preferred contractor for the two new Production Sharing Contracts for which it had applied in the Mongolian Exploration Licensing round.

· The company formed the Sunsteppe joint venture with an experienced developer to pursue opportunities in the Mongolian renewable energy sector.

Mid-2024 update

· Local land access approvals are now in hand allowing operations to go ahead on Block XX in 2024 whilst the State Special Purpose Certification process is completed in parallel.

· Preparations are being finalised for completion of the Heron 1 well and the contractor has indicated that it should be ready to mobilise in July.

· Progress is being made on the exclusive green energy development projects that the Sunsteppe joint venture has high-graded at Choir (50MW Battery Storage) and at the major Oyu Tolgoi mine (24MW renewable energy supply for green hydrogen production).

2023 Financial Highlights

· As of 31 December 2023, the Group’s cash position was $4.5 million (inclusive of Financial Assets) (31 December 2022: $5.1 million).

· The Group’s net loss after tax for the twelve months ended 31 December 2023 was $5.93 million (31 December 2022: loss $2.95 million).

· As announced on 2 February 2023, the Company raised gross proceeds of US$6.6 million from a Capital Raise comprising of the issue of 215,121,952 new Ordinary Shares at a price of 2.5p per share.

Mike Buck, CEO of Petro Matad, said.

“2023 proved to be a frustrating year on Block XX, where the significant step of Cabinet approval of State Special Purpose Certification for the area did not translate into a rapid renewal of Petro Matad’s licence to operate. Whilst that certification is still to be finalised and is having to wait until after the imminent Mongolian parliamentary elections, the fact that we were recently able to secure locally approved land use agreements for the areas in which our next operations are planned, ends a very long wait. We share our shareholders’ relief and excitement that the completion operations on Heron 1 will go ahead with contractors planned to mobilise in July to prepare the well for production. Negotiations with PetroChina for oil transport, processing, export and sale are ongoing with the support of the industry regulator.

Our shareholders’ patience and support are much appreciated as is the dedication and motivation of our staff. The Company will be focussing maximum effort on moving the Heron development forward through the second half of 2024 and I look forward to updating you further.”

There is little more to add, more than most the results are historic and nothing happened during the period. After the period end approval was received for block XX and Heron -1 may be back in business, there is also more after that but let’s take it a step at a time…

Thanks for posing plumo

LONDON, 29 May 2024: Petro Matad Limited, the AIM quoted Mongolian oil company provides the following operational update.

Key Company Updates

· The Company has received the remaining approvals necessary from Matad District to allow the 2024 operational programme to commence. Land use certificates have been issued for the three areas of operation selected by the Company.

· Discussions on timing of mobilisation to re-enter and complete the Heron 1 well for production are ongoing with service provider DQE.

· Petro Matad continues to push the central government to complete the certification process and confirm Block XX as State Special Purpose land to streamline the permitting process in future years. MRPAM has written to the Provincial authorities telling them to revise the coordinates of the area which overlaps with Petro Matad's Exploitation Licence.

· The Company's renewable energy joint venture is progressing its two high-graded projects and has a number of new opportunities including a potential export to China initiative.

Operational Update

Block XX land access and Heron 1 completion

Following the approval of land access from the Matad Citizens' Representatives Committee in late February, the Company has now secured the Matad Governor's follow up resolution and the land use agreement for the three areas chosen for operations in 2024. The land access granted is valid for five years, and this local level approval allows work to go ahead whilst the central government's process to certify the Block XX Exploitation Area as State Special Purpose Land is completed.

As part of the local level approval, with the support of the Land Agency and industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), Petro Matad paid compensation to the herders whose registered pastures will be impacted by the Block XX Exploitation Area.

With the local land use approval in place, Petro Matad is in discussion with service provider DQE to agree the timing of mobilisation of the completion crew to Heron 1. If possible, it is hoped to have the crew at site before Mongolia's parliamentary elections on 28th June, although campaigning tends to have a disruptive influence on logistics in the country. If not possible before, mobilisation shortly after the election will be targeted.

Discussions with PetroChina on oil processing, export and sale are waiting on feedback promised at a constructive meeting held in early May. Even if the oil offtake is not finalised, Petro Matad will prioritise getting the Heron 1 well ready to produce as soon as possible since we are aware that DQE expects to be busy with PetroChina and other operators from early Q3 2024.

Certification of Block XX as State Special Purpose Land

This process is moving slowly and the central government's focus on the parliamentary elections is a further hinderance. MRPAM has written to the Provincial authorities instructing them to revise the coordinates of their overlapping area which impinges on the Block XX Exploitation Area. Meanwhile, the Ministry for Economic Development has advised that its preparation for a submission to Cabinet to attempt to remove the obstacles to completing the certification process is progressing. The Company does not expect substantive progress until after the June elections but will continue to push for progress before the elections. With the District level approvals in hand, work can now be done, but special purpose certification represents the long-term solution and is still required to mitigate any delays to operational activities that may arise in future years.

Renewable Energy Projects

SunSteppe Renewable Energy (SRE)'s project to provide green hydrogen to Mongolia's major Oyu Tolgoi copper and gold mine is progressing. Wood Group is undertaking the detailed technical and commercial evaluation which is scheduled to be completed in Q3 2024 and multilateral and commercial banks are showing interest in this project. Meanwhile, on the Choir 50MW Battery Energy Storage System project, environmental studies have begun as part of the preparations to submit the application for the licence to construct.

A third project involving renewable electricity export from Mongolia to China is under discussion following the signing of an exclusive cooperation agreement with a major, state-owned Chinese utility. The agreement envisages a 1.5GW project.

SRE continues to pursue a number of other initiatives.

Mike Buck, CEO of Petro Matad, said:

"We are delighted to have finally secured land access on Block XX and are looking forward to getting back on to the Heron 1 site and completing the well for production. The special purpose certification process remains a frustration but at least now we can work in parallel.

SRE is making good progress on its two high-graded projects and the power export initiative offers exciting potential. It is very pleasing to see that numerous new opportunities are being generated by the team."

Further operational updates will be provided in due course.

Petro Matad has provided the following operational update.

From Malcy's blog

4/26/24

Key Company Updates

· The Company is working with the local government agencies to secure the remaining approvals necessary from Matad District to allow the 2024 operational programme to commence. Preparations are being made to complete the Heron 1 well for production once approvals are in hand and when contractor crews return to Mongolia.

· Petro Matad continues to push the central government to complete the certification process and confirm Block XX as State Special Purpose land to streamline the permitting process in future years and reduce the risk of interference or obstruction.

· SunSteppe Renewable Energy (SRE), the Company’s renewable energy Joint Venture, continues to make good progress. An exclusive MoU with Oyu Tolgoi mine to develop a Green Hydrogen project has been signed and grant funding from the Japanese government has been secured. SRE’s 50MW Battery Energy Storage System project has now received technical approval.

Operational Update

Block XX land access and Heron 1 completion

Following the approval of land access from the Matad Citizens’ Representatives Committee, the Company has been liaising with the local authorities to secure the Matad Governor’s resolution and the land use agreement. Petro Matad has been working to correct misinformation about the Company from local activists and protesters that have been critical of oil production operations in the area for some time, protesting online and in person against the committee’s decision. The execution of the aforementioned documents will allow work in the areas chosen for 2024 operations to go ahead irrespective of the slow progress of the central government process to complete the certification of the Block XX Exploitation Area as State Special Purpose Land.

Petro Matad is also standing-by to pay compensation to the herders whose registered pastures were impacted by the award of the 214km2 Block XX Exploitation Area. These payments, set out in law, should be paid from the State budget but recognising that the process could be very slow, Petro Matad had proposed paying the herders directly itself. Payments of c.$5,000 per family were due to the 10 families affected. Petro Matad had previously proposed making payment via industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), but this was ultimately not accepted by the Ministry of Finance. Changes in the procedures to allow non-State entities to pay are now working through the Mongolian government’s system but, having requested and received a letter supporting direct payment by the Company from MRPAM, Petro Matad is ready to pay as soon as the 2024 land use agreement is signed with the Matad authorities.

With local land use approvals progressing for 2024, Petro Matad is making preparations to complete the Heron 1 well. Contracts are in place with service providers and timing of mobilisation is under discussion. Talks with PetroChina Mongolia are continuing in order to have offtake arrangements including transport, processing, export and sale of oil in place once the well is ready to produce.

Certification of Block XX as State Special Purpose Land

This process is still being held up by the Provincial Governor’s refusal to sign off on the government’s key Tripartite Agreement and whilst completion of the District level approvals will allow 2024 operations to go ahead, the Company is still pushing for the long-delayed certification process to be completed. Certification will simplify future permitting and reduce the chances of interference. The Ministry for Economic Development, which is in charge of stimulating foreign investment in Mongolia has been very active on this issue and is preparing a submission to Cabinet to attempt to remove the obstacles to completing the process. The Company continues to cooperate with all relevant agencies to make sure this process is completed but, at the same time, is looking at any legal recourse it may have if the central government fails to rectify the situation and so delays operational activities in future years.

Renewable Energy Projects

Our renewable energy Joint Venture has had a very active period at the start of 2024, with its two high-graded projects having taken important steps forward.

The first project involves the provision of Green Hydrogen to Mongolia’s major Oyu Tolgoi copper and gold mine in which Rio Tinto is the major investor. An exclusive Memorandum of Understanding has been signed with Oyu Tolgoi and the Japanese Overseas Environmental Cooperation Centre (OECC) to develop the project and supply Green Hydrogen (which is hydrogen produced from renewable energy) which will be used to provide heat to facilities at the mine. Through the involvement in the venture of OECC, the partnership has already secured some Japanese Government grant funding to support this ground-breaking green energy initiative. An application for further grant funding is expected to be made in due course. The total grant funding for a project such as this could be up to 40% of the capital expenditure requirement. Oyu Tolgoi, in the South Gobi region of Mongolia, is one of the largest known copper and gold deposits in the world and Oyu Tolgoi LLC is a Mongolian company, jointly owned by Erdenes Oyu Tolgoi LLC on behalf of the Government of Mongolia (34 per cent) and Rio Tinto (66 per cent). Rio Tinto also manages Oyu Tolgoi on behalf of the partnership. Petro Matad is delighted to see SRE cooperating on this exciting project which is designed to demonstrate the potential for Green Hydrogen to be used as a fuel in large scale mining and so to contribute to the decarbonisation of such operations.

SRE’s second high graded project is the Choir 50MW Battery Energy Storage System (BESS). Choir is a town in central Mongolia and the site of the largest electricity substation in the central portion of the Mongolian national grid. The government has identified the need for a substantial BESS at Choir to help stabilise the grid and reduce high-cost import of power from China and Russia at peak hours, when Mongolia cannot meet domestic demand, and the economically wasteful export of power during off peak periods when the country’s base load exceeds domestic demand.

SRE has secured approval of the feasibility study from the Ministry of Energy for a 50MW BESS project at Choir and is now preparing the application for the licence to construct. This project could be online as early as 2025 and will help to stabilise the Mongolian electricity grid, reduce the amount of coal used in power generation and increase the dispatch of existing renewable energy producers. SRE is keen to move this project ahead as quickly as possible. Mongolia has recently commissioned its first BESS, an 80MW project funded by the Asian Development Bank, and this has had a positive impact through what was a very hard winter in Mongolia. The Ministry of Energy has identified a significant need for BESS projects around the country and SRE is well positioned as an early entrant to be a major player in this sector.

Mike Buck, CEO of Petro Matad, said:

“We are pushing to secure approval from Matad Soum for the land access required to execute our 2024 work programme and we are gearing up for operations during the summer. The negative reactions to the committee’s decision and misinformation spread by activists were not unexpected and underline why the central government certification process is so important for the long term and is our preferred solution.

However, with 2024 parliamentary elections looming and central government moving slowly, we are pursuing the local solution as a priority. We are also pushing the central government hard to resolve its internal issues which have created the frustrating obstruction of the state special purpose certification process for Block XX. We will buy ourselves a long-delayed operating window with the local approval for 2024 if we can get it, but we do not want to go through such a process every year.

Separately, the progress made by our renewable energy joint venture is very pleasing and to see it so quickly in partnership with Japan’s OECC and involved with the decarbonisation of the globally significant Oyu Tolgoi mine is testament to the credibility, professionalism and motivation of the team.”

For Mike Buck and his team, who must have the patience of Job by the way, they are doing anything at all possible to get get underway at the Heron field. I’d like to say that it might change anytime soon but I don’t see that and can’t hold up any hope that the authorities are doing anything to develop Heron, at least in the short term.

Petro Matad provided the following operational update on Friday

Thanks to Malcy's blog

March 4, 2024

Key Company Updates

· The Company has had its application for land access for 2024 operations approved by the Matad District Committee. A land use agreement is now being prepared which, once signed, will allow 2024 operations to go ahead commencing with completion operations on the Heron 1 well.

· The Company continues to push the Government to complete the regulatory formalities to confirm Block XX as State Special Purpose Land and understands and shares the frustration felt by shareholders. The continued refusal of the Provincial Governor to sign off on a Tripartite Agreement which has already been approved by the Ministry of Mining and Heavy Industry (MMHI) and the Central Land Agency has been raised by the Company with all relevant agencies and also at the highest levels in the Mongolian Government.

· Petro Matad is pleased to be the chosen contractor for the two areas for which it submitted applications in the 2022/23 Exploration Tender Round. The award of new acreage is now expected to be made after the 2024 Mongolian Parliamentary elections in the middle of this year.

Operational Update

Block XX local level land use approval: In light of the ongoing delays in the completion of the process by which the Company’s Exploitation Area is being confirmed as State Special Purpose Land, the Company has engaged with the District authorities to secure local level approval of land usage. At a meeting of the Matad Citizens’ Representatives Committee at the end of February the Company’s application for land use in 2024 was approved. This approval covers all the areas in which the Company wishes to operate during the year. The approval means that the land use agreement can now be prepared and signed by the District authorities and by the Company and it will allow our planned operational activities to go ahead whilst the Special Purpose Certification process is completed. We are hopeful that the Provincial authorities, who are holding up the Special Purpose Certification of the Exploitation Area, will not disrupt in any way the District’s approval process, but we remain vigilant.

The Company is now stepping up the planning for operations to complete the Heron 1 well for production once the contractors re-mobilise after the winter hiatus and as soon as they can make available their crews and equipment. Discussions with PetroChina for transport, processing, storage, export and sale of the Company’s early production are also ongoing.

State Special Purpose Certification process status: A number of regulatory steps were required to be completed by the Government covering the granting and management of State Special Purpose Land. As reported previously, a key part of this is a Tripartite Agreement between the Central Land Agency, MMHI and the Governor of Dornod Province. The Governor is still withholding his signature, now on the basis of a partial overlap of the Block XX Exploitation Area with a provincial Protected Area as he claims it breaches the principle of no overlaps in areas for specific land use.

The Block XX PSC was signed in 2006 and the provincial Protected Area was not declared by the province until 2014, so it is the province that is in beach of the no overlap principle. Furthermore, the Land Law allows the central Government to take such land for State Special Purpose use, so this overlap should not be an obstruction to the certification process. Heron 1 and the other locations that the Company wishes to work on in 2024 are not within the overlapped area.

The Company has raised this issue formally with government agencies and ministers including: the Mineral Resources and Petroleum Authority of Mongolia, MMHI, Ministry of Economic Development, Central Land Agency, Deputy Prime Minister, Prime Minister and the President.

The Government needs to complete this process and Petro Matad is pushing hard for this to be done.

New acreage: As previously reported, the Company was selected as the preferred contractor for the two blocks for which it submitted applications. Despite setting an aggressive timetable for completion of the negotiations and award of the Production Sharing Contracts, the government is now not expected to make the awards until after the 2024 parliamentary elections which take place in the middle of this year. This new timeframe is not critical as the Company intends to focus all of its operational activity on Block XX in 2024.

Mike Buck, CEO of Petro Matad, said:

“We are very pleased that Matad Soum has approved our application for 2024 land access and we are following up as a matter of priority to finalise and sign the land use agreement. With that being said, we are extremely frustrated with the continued delay to the State Special Purpose Certification process and we continue to push to get this resolved.

The diligent efforts of our Government and Community Relations teams have facilitated this progress on land access and we are grateful to the Matad Citizens’ Representatives Committee for its favourable hearing of our application and for its approval.”

Further operational updates will be provided in due course.

This pantomime continues, land access for 2024 operations has been approved so that the Heron 1 well can be completed and commence production but regulatory formalities still appear to be stalled with regard to the protected area.

And as for submitting applications in the 2022/23 Tender round they will be held after the 2024 elections…

LONDON, 1 March 2024: Petro Matad Limited, the AIM quoted Mongolian oil company provides the following operational update.

Key Company Updates

· The Company has had its application for land access for 2024 operations approved by the Matad District Committee. A land use agreement is now being prepared which, once signed, will allow 2024 operations to go ahead commencing with completion operations on the Heron 1 well.

· The Company continues to push the Government to complete the regulatory formalities to confirm Block XX as State Special Purpose Land and understands and shares the frustration felt by shareholders. The continued refusal of the Provincial Governor to sign off on a Tripartite Agreement which has already been approved by the Ministry of Mining and Heavy Industry (MMHI) and the Central Land Agency has been raised by the Company with all relevant agencies and also at the highest levels in the Mongolian Government.

· Petro Matad is pleased to be the chosen contractor for the two areas for which it submitted applications in the 2022/23 Exploration Tender Round. The award of new acreage is now expected to be made after the 2024 Mongolian Parliamentary elections in the middle of this year.

Operational Update

Block XX local level land use approval: In light of the ongoing delays in the completion of the process by which the Company's Exploitation Area is being confirmed as State Special Purpose Land, the Company has engaged with the District authorities to secure local level approval of land usage. At a meeting of the Matad Citizens' Representatives Committee at the end of February the Company's application for land use in 2024 was approved. This approval covers all the areas in which the Company wishes to operate during the year. The approval means that the land use agreement can now be prepared and signed by the District authorities and by the Company and it will allow our planned operational activities to go ahead whilst the Special Purpose Certification process is completed. We are hopeful that the Provincial authorities, who are holding up the Special Purpose Certification of the Exploitation Area, will not disrupt in any way the District's approval process, but we remain vigilant.

The Company is now stepping up the planning for operations to complete the Heron 1 well for production once the contractors re-mobilise after the winter hiatus and as soon as they can make available their crews and equipment. Discussions with PetroChina for transport, processing, storage, export and sale of the Company's early production are also ongoing.

State Special Purpose Certification process status: A number of regulatory steps were required to be completed by the Government covering the granting and management of State Special Purpose Land. As reported previously, a key part of this is a Tripartite Agreement between the Central Land Agency, MMHI and the Governor of Dornod Province. The Governor is still withholding his signature, now on the basis of a partial overlap of the Block XX Exploitation Area with a provincial Protected Area as he claims it breaches the principle of no overlaps in areas for specific land use.

The Block XX PSC was signed in 2006 and the provincial Protected Area was not declared by the province until 2014, so it is the province that is in beach of the no overlap principle. Furthermore, the Land Law allows the central Government to take such land for State Special Purpose use, so this overlap should not be an obstruction to the certification process. Heron 1 and the other locations that the Company wishes to work on in 2024 are not within the overlapped area.

The Company has raised this issue formally with government agencies and ministers including: the Mineral Resources and Petroleum Authority of Mongolia, MMHI, Ministry of Economic Development, Central Land Agency, Deputy Prime Minister, Prime Minister and the President.

The Government needs to complete this process and Petro Matad is pushing hard for this to be done.

New acreage: As previously reported, the Company was selected as the preferred contractor for the two blocks for which it submitted applications. Despite setting an aggressive timetable for completion of the negotiations and award of the Production Sharing Contracts, the government is now not expected to make the awards until after the 2024 parliamentary elections which take place in the middle of this year. This new timeframe is not critical as the Company intends to focus all of its operational activity on Block XX in 2024.


Mike Buck, CEO of Petro Matad, said:

"We are very pleased that Matad Soum has approved our application for 2024 land access and we are following up as a matter of priority to finalise and sign the land use agreement. With that being said, we are extremely frustrated with the continued delay to the State Special Purpose Certification process and we continue to push to get this resolved.

The diligent efforts of our Government and Community Relations teams have facilitated this progress on land access and we are grateful to the Matad Citizens' Representatives Committee for its favourable hearing of our application and for its approval."

Petro Matad has provided the following operational update.

(Thanks to Malcy's blog)

Dec 19, 2023

Key Company Updates

· The Company continues to push the Government to complete the regulatory formalities to guarantee land access and allow completion operations at Heron 1 to commence. Significant progress has been made with the Matad District authorities with one outstanding issue at the Provincial level still to complete.

· The slow bureaucratic process to complete the special purpose land certification has prevented any in-field well completion operations but the winter hiatus provides time to complete the formalities which will allow operations to commence as early as possible at the start of the operational season in 2024.

· The Company has completed the restoration of the Heron-1 drilling location in preparation for mobilization of well completion equipment.

· The 2022/23 Exploration Tender Round continues with Petro Matad being confirmed as the selected contractor on the two blocks for which it submitted applications.

· The renewable energy JV, SunSteppe Renewable Energy, continues to make progress on two projects and is pursuing three others.

Operational Update

Block XX: With Cabinet approval of the special purpose certification of the Block XX Exploitation Area in early July, a number of regulatory steps were required to be completed by the Government under the 2017 legislation covering the granting and management of such areas. The Central Land Agency has completed the registration of the area and issued and signed the key Tripartite Agreement. The Ministry of Mining and Heavy Industry (MMHI) has also signed, leaving only the Governor of Dornod Province to sign. He has said he will sign once the money to make compensation payments to the 10 herder families impacted by the certification of the area has been transferred to the Provincial Government account.

In meetings facilitated by the Company, all the herders have agreed to be compensated. Under the legislation, the compensation payments should be made from the State budget but recognizing that this could be a very slow process, the Company offered and the industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) accepted that Petro Matad would make these payments. The money has been paid into the appropriate MRPAM account and is awaiting transfer to Dornod Province once the Ministry of Finance gives approval for this to go ahead. The mechanics of the transfer have taken some time for the Government to determine but we are pushing and expect this to go through soon.

The remaining steps in the regulatory process involving issuance of the special permit to MMHI and the signing of the Land Contract between the Matad District and the Company have been agreed to go ahead once the Tripartite Agreement is signed off by the Provincial Governor.

As part of our interactions with the local authorities, the Company hosted the Matad District Citizens’ Representatives Committee on a visit to the South Gobi where mining and other development projects are providing tangible benefits to the local communities in which they operate. The trip was very successful and at a meeting to conclude the trip in Petro Matad’s Ulaan Baatar headquarters the Committee thanked the Company, declared their support for the Company’s development activities in Matad and agreed the terms of the Cooperation Agreement which governs community aid expenditure during oil exploitation activities. The Cooperation Agreement is being prepared for signature and will be executed once land access has been confirmed. In a demonstration of the improved relationship, the district authorities received a presentation on a necessary amendment to the Company’s environmental plan, raised no objections and provided the necessary documentation to allow the Company to secure Ministry of Environment approval to amend its Detailed Environmental Impact Assessment.

With the necessary approvals, the Company was also able to complete the restoration of the Heron-1 drilling location in preparation for the mobilization of well completion equipment and the installation of the beam pump, tanks and generator.

New acreage: On the two blocks for which Petro Matad submitted applications, the Company has been selected as the preferred contractor. Fiscal terms have been agreed and the Company’s proposed changes to the model Production Sharing Contract are now with MMHI for review and final submission to Cabinet. The tender process has slowed in recent months, perhaps in light of political attention being diverted due to next year’s parliamentary elections. Petro Matad is happy to have been confirmed as the selected contractor for the areas it has chosen and would like to see the tender process concluded soon although operational activity will focus on Block XX in 2024.

Renewables: Our renewable energy JV, SunSteppe Renewable Energy, continues to make progress under the leadership of its CEO Ms. Zula Luvsandorj. SunSteppe is progressing several exciting opportunities including two high graded projects with three more under detailed technical and commercial review.

Mike Buck, CEO of Petro Matad, said:

“On the land issue, we feel that we are almost there, but we will keep pushing until the process is complete. In the absence of any recent precedents, every step has been something new for the Government which has caused delays. We will certainly be ready to operate at the end of the winter stand down when we expect the long running saga of land access to be fully resolved.”

Nothing to add to what Mike Buck has said, its all about delays in the system in Mongolia.

Thanks to Malcy's Blog

Sept 28, 2023

Petro Matad has announced its unaudited interim results for the six months ended 30 June 2023 and provides an operational update.

Key Company Updates

· The Company continues to push the Government to complete the regulatory formalities to allow completion operations at Heron 1 to commence. The Provincial Government has been very slow to respond which is putting the plan to complete the well before winter at risk.

· The local district authorities have however indicated that they are open to the Company operating in parallel with the slow-moving bureaucracy if Central Government supports the Company in doing so. This option is now being pursued as a priority.

· The 2022/23 Mongolian Exploration Tender Round continues with Petro Matad submitting two applications for new blocks and actively looking at one more area to determine if a third application is merited.

· Our renewable energy JV, SunSteppe Renewable Energy, is actively pursuing two projects, a battery energy storage facility and a green hydrogen project as it continues to push into the Mongolian renewable energy sector. Both projects have the potential to generate revenue in the near term.

Financial Summary 1H 2023

The Group posted a loss of USD 1.90 million for the 6-month period ended 30 June 2023, which compares to a loss of USD 1.62 million for the comparable period in 2022. The Company’s cash balance at 30 June 2023 was USD 8.39 million (USD 0.82 million in cash and USD 7.57 million in Financial Assets – which are term deposits with a term of 3 months or more), which compares to a cash balance of USD 6.62 million (USD 3.10 million in cash and USD 3.52 million in Financial Assets) on 30 June 2022.

As previously announced, a successful fundraise totalling USD 6.6 million of gross proceeds was completed in February 2023, primarily to fund exploration drilling in the Company’s operated Block V and to advance renewable energy opportunities through a newly established joint venture. Despite the continuing frustration with the delays in progressing the development of the Heron discovery it was very encouraging that both the placing and retail offer were over-subscribed.

Operational Summary 1H 2023

On the Company’s Block XX where the Heron discovery is ready for the first phase of development to begin, the land access issue, and thus commencement of production operations, remained delayed through the first half of 2023 subject to registration of the Exploitation Area as Special Purpose Land in accordance with Mongolia’s Land Law. Significant progress was made to secure the certification and all ministries in the Mongolian Government confirmed their support. The documentation for the certification was completed by end June for submission to Cabinet in July 2023.

In parallel, the Company finalised negotiations with DQE Drilling on a long-term drilling contract which will be submitted to industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) for discussion and approval. Commercial negotiations advanced with PetroChina for the use of its production infrastructure on neighbouring Block XIX.

On the Company’s Block V exploration PSC in central Mongolia, the Velociraptor 1 well was drilled on a high impact prospect in June/July with the full support of the local communities. The well was drilled on schedule and within budget but as has been reported previously, despite encountering more than 350 metres of good quality reservoir sections, the well was dry and it has been plugged and abandoned.

MRPAM’s 2022/23 Exploration Tender Round continued through the first half of the year and the Company has made applications for two blocks. Negotiations of the contractual terms are ongoing.

In early 2023, Petro Matad completed the formation of a joint venture company, SunSteppe Renewable Energy (SRE), to develop renewable energy projects in Mongolia with the goal of reaching construction ready status on its first projects within 24 months. Priority projects included a battery energy storage system project designed to help improve the stability of Mongolia’s electricity grid and so reduce coal consumption for power generation and allow the dispatch of more renewable energy from projects already in operation. The joint venture is also pursuing off-grid projects to supply renewable energy to mining projects where operators are keen to decarbonise their operations.

Operational Update and look ahead

Block XX: The Cabinet approved the special purpose certification of the Block XX Exploitation Area in early July, following which the Company has been pushing hard for the Government to complete the regulatory formalities and so allow completion operations at Heron 1 to commence. Whilst good progress has been made with Central Government agencies, the Tripartite Agreement between the Land Agency, the Ministry of Mining and Heavy Industry (MMHI) and the Provincial Government which regulates the management of special purpose land has yet to be finalized. The Land Agency issued the draft in July and MMHI quickly responded positively but the Provincial Government wants to complete herder compensation first and this further bureaucratic delay may jeopardise the chance to put Heron 1 on production before the winter operational shut down. In response, the Company is urging central and provincial authorities to speed up the remainder of the process and, with the special purpose certification now approved, Petro Matad has asked the district authorities to allow Heron 1 operations to go ahead in parallel with the slow-moving bureaucracy at central and provincial levels. The district representatives have signaled their willingness to consider this so long as the Central Government supports the initiative and MRPAM has confirmed its support and is preparing a letter to that effect. The Company continues to direct all its efforts at getting Heron 1 on stream before the oilfield contractors shut down for the winter.

Block V: The post-well evaluation of Velociraptor 1 is progressing.

New acreage: In addition to the two applications lodged for new blocks earlier in the year, Petro Matad is looking at one more area in the 2022/23 exploration tender round to determine if a third application is merited.

Renewables: Post the period end, the Company’s renewable energy vehicle, SRE, has made very good progress. In consultation with the Ministry of Energy, the need for a 50MW/150MWh battery energy storage facility in central Mongolia was defined. SRE’s team has completed the required feasibility studies and the grid connection study for the project has been approved by the National Dispatching Centre. All required documentation has been submitted to and accepted by the Technology Committee of the Ministry of Energy. Once the committee’s approval is in hand, the License for Construction of the facility will be requested. SRE expects that this project can be brought to construction ready status with a power purchase agreement and tariffs in place by mid-2024. SRE has access to land already under lease for the facilities within two kilometres of the tie in point and the footprint is small. The development costs of this project are low and the project is expected to offer a double-digit rate of return and could be online and generating revenue by 2025.

A second project involving a utility scale wind farm to supply renewable energy to generate green hydrogen for use at a mine operation in the South Gobi is also progressing with a forecast timescale similar to SRE’s battery storage project. The project is designed to demonstrate the viability of green hydrogen as a fuel for use in the mining industry in Mongolia and SRE is very excited to be involved. This initiative has the strong support of the Mongolian Government and a memorandum of understanding has been signed with the Ministry of Energy.

SRE and Petro Matad will determine, once these two projects reach construction ready status, how best to fund them. Debt funding for similar projects is already established in Mongolia, leaving open the possibility that SRE can aspire to stay involved in the construction phase and establish itself as a key renewable power producer in the country.

The potential for renewable energy in Mongolia is huge with solar and wind power set to make up an increasing part of the country’s energy mix in the coming decades. This has been embraced by lawmakers, with Mongolia ratifying international conventions including the Paris Agreement. SRE has made good progress so far and has identified several other projects for consideration. We look forward to progressing this exciting new venture that has the potential to generate revenue in the near term.


Mike Buck, CEO of Petro Matad, said:

“The slow pace of the completion of the regulatory process that will allow us to commence the Heron development is extremely frustrating. Whilst we are pushing hard with all agencies, and we have equipment and contractors ready to mobilise, unless the pace suddenly quickens it is now unlikely that we will get the Tripartite Agreement signed in time. However, we are working on a limited access agreement at district level and leaving no stone unturned to give us the chance to achieve our goal of getting Heron 1 onstream before winter.

Meanwhile, it is pleasing to see that our renewable energy initiative is moving ahead. The battery storage project has considerable follow-on potential since the Ministry of Energy has identified a significant need for energy storage in various locations throughout the country. The Government is very keen to see if green hydrogen can be used effectively, whilst the mine operators are looking to decarbonise their operations and SRE’s project targets these goals whilst also providing the potential for an excellent commercial return for the developer.

As ever we appreciate our shareholders’ patience as we work through the final stages of getting Heron 1 on stream and in particular, those shareholders that have been with us on this journey since the Heron discovery and before. I look forward to updating you further on our renewable energy initiative and our other ventures.”

Mike Buck’s reference to shareholder patience couldn’t be more apposite, with the chance of any major moves in the next few months I think MATD is more of a 2024 stock at the moment. The shares are resting on the YTD low but with the 1 year low a penny below here I think the November 2022 price will probably be re-visited first. Having said that I still feel that longer term there is something out there and I’m sure Mike will be over sometime to talk me through it, it’s been a long time!

https://www.docdroid.net/YVOTsfh/matd-20230710pdf-pdf

Thanks plumo

Petro Matad has announced that the Velociraptor-1 exploration well in the Taats Basin of Block V located in central Mongolia reached a total depth (TD) of 1500m and wireline logging has been completed but unfortunately all the reservoirs encountered were water bearing.

The well came in close to prognosis at all levels. The primary objective Late Jurassic/Early Cretaceous Undur Formation was encountered at 1170m and had good quality reservoir sands interbedded with shales over a c. 200m interval. In the secondary objective Early Cretaceous Shinehudag Formation, three thick sand units were drilled with average porosity of around 18%. Good quality electric wireline logs confirmed both objectives to be water wet.

The well will now be plugged and abandoned and the rig will be demobilised. Operations were carried out on time and as budgeted with the full support and cooperation of the local community. The well results will now be incorporated into the Company’s interpretation of Block V before any further operational activity is undertaken in the area.

Mike Buck, CEO of Petro Matad, said:

“The results of the Velociraptor 1 well are obviously disappointing but such high impact targets, drillable at modest well cost cannot be ignored when exploring frontier areas. The well provides a valuable new data point to help unlock the hydrocarbon potential of the southern Gobi. We will now incorporate the well results into our overall evaluation of the area. Meanwhile our operational focus shifts back to Block XX where the Heron development offers near term oil production and revenue generation and where low risk, near field exploration opportunities have already been identified which provide exciting upside potential.”

Further operational updates will be provided in due course.

This is indeed a big disappointment for Petro Matad and its shareholders for whom high expectations and a long wait have led to a dry hole at Velociraptor 1. But Mike Buck is right to say that this reasonably inexpensive well in a frontier acreage had to be drilled.

It is good that Block XX received the necessary approvals last week and it should be remembered that there are plenty of exciting things to go after in the Heron development. All is not lost…

Block XX Exploitation Licence
Petro Matad Limited (AIM:MATD), the AIM quoted Mongolian oil company is pleased to announce that the Cabinet of the Mongolian Government has approved the certification of the Block XX Exploitation Area, including the Heron oil discovery, as special purpose land.



Having received feedback from all other ministries, the Ministry of Construction and Urban Development, which is responsible for land issues, submitted the documentation to Cabinet and the proposed certification was discussed at the Cabinet's meeting on 5 July 2023. The Cabinet approved the certification and also instructed officials to conclude the follow up formalities required under the Land Law. The Company will now work with the central Land Agency and local authorities to complete the registration of the area and to sign the necessary contracts required by the regulations on the management of special purpose land. In parallel, we are already in discussion with service providers to determine a timeframe in which crews and equipment can be available for the completion for production of the Heron 1 well.



The certification of Block XX as special purpose land gives the Company the legal right of access to the entire area for the purpose of hydrocarbon exploration and exploitation.



Mike Buck, CEO of Petro Matad, said:



"We are very pleased that the Cabinet has approved the certification of Block XX as special purpose land. This important step has been a very long time coming but now provides a firm legal standing to the Company to execute the approved plan of development for Heron and to explore the exciting potential around it.



I would like to thank all our shareholders and in particular those that have been with Petro Matad for some years now, for their patience during this protracted certification process and I look forward to sharing further updates as we move into the next phase."



Further operational updates will be provided in due course.

Block XX Exploitation Licence
Petro Matad Limited (AIM:MATD), the AIM quoted Mongolian oil company is pleased to announce that the Cabinet of the Mongolian Government has approved the certification of the Block XX Exploitation Area, including the Heron oil discovery, as special purpose land.



Having received feedback from all other ministries, the Ministry of Construction and Urban Development, which is responsible for land issues, submitted the documentation to Cabinet and the proposed certification was discussed at the Cabinet's meeting on 5 July 2023. The Cabinet approved the certification and also instructed officials to conclude the follow up formalities required under the Land Law. The Company will now work with the central Land Agency and local authorities to complete the registration of the area and to sign the necessary contracts required by the regulations on the management of special purpose land. In parallel, we are already in discussion with service providers to determine a timeframe in which crews and equipment can be available for the completion for production of the Heron 1 well.



The certification of Block XX as special purpose land gives the Company the legal right of access to the entire area for the purpose of hydrocarbon exploration and exploitation.



Mike Buck, CEO of Petro Matad, said:



"We are very pleased that the Cabinet has approved the certification of Block XX as special purpose land. This important step has been a very long time coming but now provides a firm legal standing to the Company to execute the approved plan of development for Heron and to explore the exciting potential around it.



I would like to thank all our shareholders and in particular those that have been with Petro Matad for some years now, for their patience during this protracted certification process and I look forward to sharing further updates as we move into the next phase."



Further operational updates will be provided in due course.

Petro Matad from Malcy's Blog

June 20, 2023

we are delighted to have spudded Velociraptor-1



2022 Operational Highlights

The Company continued to push the Mongolian government and authorities to register Block XX Exploitation Area as special purpose land.
Negotiations with DQE Drilling entered their final stages for a multi-well development drilling contract with the Company securing cost reductions that can make a real difference to project cash flows and asset value.
Block V project readiness continued with a cost-effective drilling solution found for Velociraptor.
MRPAM announced an Exploration Licensing round covering 14 blocks in the prospective fairways of the southern half of the country.
Petro Matad continued to explore opportunities in the Mongolian renewables sector following Board approval to do so.

Current situation

On Block XX, the Company continues to push government on certification of the Exploitation Area as special purpose land and finally conclude the process. The Ministry of Construction and Urban Development has completed its internal work and has submitted the documentation to all other government ministries for comment prior to submission to Cabinet.
The Velociraptor-1 exploration well in the Taats Basin of Block V located in central Mongolia spudded on 13 June, targeting an inversion anticline prospect estimated to have 200 million barrels (MMbo) of Mean Prospective Recoverable Resource potential. Encouraging results in the Velociraptor prospect would significantly de-risk two adjacent prospects on the Raptor Trend which together have Mean Prospective Recoverable Resource potential of an additional 375 MMbo.
The Company raised US$6.6 million through a capital raise that will allow the Company to test the low-cost, high impact Velociraptor exploration prospect, evaluate new areas offered for licencing by the Mongolian government in the 2022/23 tender round and explore renewable energy projects.
The Company formed a joint venture (JV) with a very active and successful Mongolian renewable energy project developer called SunSteppe Energy (“SunSteppe”). This JV will give the Company an opportunity to compete in Mongolia’s growing renewables sector.

2022 Financial Highlights

As of 31 December 2022, the Group’s cash position was $5.1 million (Financial Assets) (31 December 2021: $8.2 million)
The Group’s net loss after tax for the twelve months ended 31 December 2022 was $2.95 million (31 December 2021: loss $2.1 million)

Mike Buck, CEO of Petro Matad, said:

“2022 saw an easing of Covid-19 related delays that had impacted service providers and cross-border activity. We were pleased that we were able to progress our preparations for Heron development, our negotiations with DQE Drilling and to continue our investigations on the Block V Exploration PSC.

This year we hit the ground running and set to work on a capital raise to allow Petro Matad to move ahead with testing the low-cost, high impact Velociraptor exploration prospect and evaluate new areas offered for licencing by the Mongolian government. We have also ventured into the renewable energy sector in Mongolia through the SunSteppe Renewable Energy joint venture which we hope will generate near term opportunities for us and our partner.

We continue to push forward with our 2023 work programme which of course includes urging the government to certify Petro Matad’s Block XX Exploitation Area as special purpose land. Meanwhile we are delighted to have spudded Velociraptor-1 which we have wanted to drill for some time. Encouraging results here would significantly de-risk two adjacent prospects on the Raptor Trend which together have a resource potential of an additional 375 MMbo.

I would like to thank our loyal shareholders for their continued support and hope that the recent spudding of the Velociraptor well demonstrates our firm commitment to our work programme. I very much look forward to updating you in the coming months with our progress on multiple workstreams that are now in play.”

Nothing new here, excitement about Velociraptor and no deal on Block XX.

from Malcy's Blog


Petro Matad has announced that the Velociraptor-1 exploration well in the Taats Basin of Block V located in central Mongolia spudded on 13 June. The well is the first on the Raptor Trend of prospects located 7km south of the Snow Leopard-1 well drilled in 2018 that proved a working petroleum system in the Taats Basin. Velociraptor-1 is targeting an inversion anticline prospect estimated to have 200 million barrels (MMbo) of Mean Prospective Recoverable Resource potential and is planned to drill to a total depth (“TD”) of circa 1,500 metres. The well is expected to take circa 30 days to reach TD and encouraging results in the Velociraptor prospect would significantly de-risk two adjacent prospects on the Raptor Trend which together have Mean Prospective Recoverable Resource potential of an additional 375 MMbo.

Block XX Exploitation Licence

On Block XX, the Ministry of Construction and Urban Development has completed its internal work on the certification of the Company’s Exploitation Area as special purpose land and has submitted the documentation to all other government ministries for comment prior to submission to Cabinet. We continue to press the relevant authorities to conclude this process.

The well that some thought might never get drilled is underway as Velociraptor-1 has spudded in the search for some 200 million barrels of oil and we will all know in around a month’s time the result of a well which could open up the adjacent Raptor prospects for another 375 MMbo.

Oh, and the certification of Block XX still awaits submission to Cabinet but surely…

Thanks for posting that link Plumo

https://masterinvestor.co.uk/equities/petro-matad-chasing-the-mongolian-raptors/

Thanks to Malcy's blog
https://www.malcysblog.com/2023/05/oil-price-coro-petro-matad-jadestone-and-finally/


May 22, 2023


Petro Matad has provided the following operational update.

Key Company Updates

· Rig arrival and Velociraptor 1 spud are forecast during the first half of June.

· Mobilization of site construction equipment to the Velociraptor 1 well location has commenced.

· Documentation proposing the certification of the Block XX Exploitation Area as Special Purpose Land for submission to Cabinet is being prepared by the ministries responsible.

· Negotiations with the Government for a new block in Mongolia’s 2023 Exploration Tender Round are continuing.

Block V Exploration

Mobilisation of equipment to prepare the drilling location and to set-up the camp for Velociraptor 1 operations has commenced. All required equipment for the well is in the country. The water source well for the operation has also been prepared for production. All activities are planned to be completed in advance of rig arrival which is forecast by contractor Major Drilling to arrive at site in early June and to spud the well by the middle of the month. The Velociraptor 1 well is expected to reach the prognosed total depth of circa 1500 metres in circa 30 days following which the well will be logged and the results evaluated. In the event of encouragement in the well, the rig contract allows for follow up with an appraisal well. All permits are in place for Velociraptor 1 and the contingent appraisal drilling.

Velociraptor 1 is targeting an inversion anticline with recoverable resource potential of 200 million barrels and the adjacent Oviraptor and Tsagaanraptor prospects would be significantly de-risked by success and have the potential to triple the resource potential on the exciting Raptor Trend. Whilst there has been very little exploration drilling done in this part of Mongolia, Velociraptor 1 is located 7 km south of the Snow Leopard 1 well drilled by Petro Matad in 2018. This well found excellent oil source rocks and oil shows and proved that there is a working petroleum system in the Taats Basin in which the Velociraptor prospect is well located to receive hydrocarbon charge.

With the well cost estimated to be less than $2 million, with attractive fiscal terms and a low cost onshore operating environment, Velociraptor 1 is an excellent opportunity in global oil exploration.

A further notification will be issued once Velociraptor 1 has spudded.

Block XX Exploitation Licence

Documentation prepared by the Ministry of Mining and Heavy Industry (MMHI) for submission to Cabinet to secure approval to certify the Block XX Exploitation Area as a Special Purpose Area was completed. However, the Ministry of Construction and Urban Development has insisted that as the ministry responsible for land issues, the Cabinet submission must come from them. As a result, they are repeating the step of asking all other ministries for comments after which we expect they will make the submission. The loss of more time whilst this is done is frustrating but highlights the fact that this is the first oil project to be put through this bureaucratic process based on regulations introduced in 2017 and the authorities involved have no obvious precedent to follow. The Company continues to push at all levels to underscore the importance of this licence for the Company and industry in Mongolia.

At the local level, the Company continues to engage with stakeholders and has also offered support to the province which is suffering from wildfires on the steppe due to recent dry conditions.

2023 Exploration Licencing Round

Negotiations with the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) on the application for a block in Phase 1 of the 2023 open tender exploration licencing round continue. Discussions on changes to the Production Sharing Contract (PSC), on the proposed work programme and on fiscal terms have been completed. This part of the process involved a visit to the UK and to the Isle of Man by representatives of MMHI and MRPAM and we were honoured to be accompanied on the trip to the Isle of Man by the Mongolian Ambassador to the UK. Petro Matad continues to review other blocks in the tender round with a view to potentially submitting further block applications on those it high grades.


Mike Buck, CEO of Petro Matad, said:

“Preparations to drill Velociraptor 1 are well advanced and we are excited to spud in June and to explore the potential of the Raptor Trend.

“It is highly frustrating that the good work done by MMHI on the certification of the Block XX Exploitation Area as Special Purpose Land is now having to be repeated, but it is essential that the process is followed in full compliance with legislation. Shareholders can be assured that we are continuing to provide all input and assistance to the authorities in securing the certification.

“The recent visit to UK with senior representatives of MMHI and MRPAM provided an excellent opportunity to further strengthen our relationships with both organisations and we were honoured to be joined by H.E. Ambassador B. Enkhsukh, Mongolia’s ambassador to the UK, on the visit to the Company’s corporate agents in the Isle of Man.”

With Velociraptor 1 still on track for spudding in June at least MATD holders have some excitement coming up soon. With TD in around 30 days plus logging and testing they won’t have long to wait for what is a significant well for the company. The company is ready for any result including appraisal drilling in case of success.

As for the further delays to Block XX you couldn’t make it up, each time it is ready to go another obstacle is placed in the road and one wonders if the certification will ever be completed. Finally the company continue to progress their application for a Block in the 2023 Licence Round.

The shares have roughly tripled this year, excluding dilution from the raise, ahead of the Velociraptor drilling, so with no backing from Block XX the well has assumed the status of Atlas holding the value of MATD on its shoulders, no pressure there then…

https://www.lse.co.uk/media/MATD/mongolian-oil-developer-petro-matad-raises-66m-to-fund-2023-activities-we-speak-to-ceo-mike-buck.html

https://www.lse.co.uk/news/MATD/petro-matad-reports-slow-progress-at-block-xx-39qe2yen0g0zslt.html

https://www.lse.co.uk/rns/MATD/proposed-fundraise-for-a-minimum-of-us40-million-bgtl3wrd2tw1z2o.html

https://www.lse.co.uk/events/
link to the webinar petro matad.

LONDON, 5 December 2022: Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil company, provides the following operational update.

Key Company Updates

· Progress being made to register the Block XX Exploitation Area as special purpose land

· Mongolia announces 14 blocks available in a new Exploration Tender. Petro Matad plans to participate and exploit its competitive advantage as the country's leading explorer

· Negotiations with DQE Drilling in their final stages for a multi-well development drilling contract

· More time secured on Block V Exploration PSC and plans for drilling Velociraptor 1 being progressed

Block XX Exploitation Licence

The Mongolian government's process to certify Petro Matad's Block XX Exploitation Licence area as special purpose land is progressing. Meetings held at the Matad district and Dornod provincial levels of citizens' committees resulted in voting that did not to support the central government's certification proposal. The Mineral Resources and Petroleum Authority of Mongolia ("MRPAM") has however written to the Ministry of Mining and Heavy Industry ("MMHI") recommending certification of the Block XX Exploitation Licence despite the local committees' views. The Company's focus is now to support MMHI in progressing the matter through to a cabinet resolution as quickly as possible. Given the delays, Petro Matad is unlikely to be in a position to operate on the Heron development until the spring of 2023, once its land access rights have been re-established.

Production Readiness

The Company continues to target having everything in place to get the Heron 1 well onstream as soon as the land issue is resolved by the government. Pumping, downhole completion and power generation equipment is now all in country. Production tanks and other related surface equipment have been sourced from Petro China, offering a cost effective solution to achieve rapid production start up. Discussions with Petro China on oil processing, export and sales have also begun with the facilitation and participation of MRPAM.

Negotiations with DQE Drilling ("DQE"), the main provider of drilling services in Mongolia, have continued and a contract for a multi-well development drilling programme is in the final stages of discussion. The contract envisages a reduction in drilling costs and deferral of some costs to allow a portion of the drilling expenditure to be settled from future production revenue. The contract still needs to be finalised and agreed with DQE and then with MRPAM, but the cost reductions and payment phasing could significantly improve project cash flows and overall asset value since the largest portion of the Heron development costs are drilling related.

Block V Exploration

On the Block V Exploration PSC area, local government approvals for land access have been secured. This area does not have the same history with the oil industry that Dornod Province has and as such, just as in previous years, thanks to its continued focus on positively engaging with local communities, Petro Matad has been able to secure all necessary permits to work on the land covering the highly prospective Raptor Trend and the Velociraptor prospect. The Company is now looking at its options and the availability of equipment to drill Velociraptor 1 on Block V in 2023.

A cost effective drilling solution for Velociraptor has been found, most equipment needed has been sourced and is already in country and MRPAM has given the necessary contractual approvals. The approval of the Company's application to secure a moratorium for 2022 on Block V has also been received from MMHI. This extends the Block V exploration period until July 2024 and ensures that there will be sufficient time after Velociraptor 1 is drilled to gather enough data and submit the necessary documentation to secure a Block V Exploitation Licence in the event of success.

2022/23 Exploration Licencing Round

MRPAM has announced an Exploration Licencing round covering 14 blocks in the prospective fairways of the southern half of the country. These areas share the same stratigraphy and geological history as proven prolific oil basins of northern China. With its extensive data base, technical expertise and operational experience Petro Matad has a significant competitive advantage as the country's leading explorer and intends to participate in the licencing round with a view to signing some new production sharing contracts.

Renewable Energy Opportunities in Mongolia

Petro Matad continues to explore opportunities in the renewables space following Board approval to do so in 2021. Work has continued this year to investigate the technical and commercial drivers of solar, wind and battery storage opportunities. A potential partner, highly experienced and well connected in the renewable energy sector in Mongolia, has been identified and negotiations for a collaborative association are at an advanced stage. The Company will update shareholders on the progress of this opportunity in due course.

Social impact 2022

In 2022, the Company undertook a significant exercise to re-evaluate its Environment, Social and Governance ("ESG") commitments. In the process, Petro Matad established a newly formulated ESG Statement published on its website and in the annual report that better describes and demonstrates its commitment to environment, social well-being and governance.

At the local level, Petro Matad continued its close engagement with the communities in which it operates. To support local development, Petro Matad worked with local governor's offices to identify projects in Block V and sponsored a local volleyball team to participate in a national tournament, funded the renovation of 4 local administrational buildings, participated in a programme of livestock restocking and the construction of a water well for irrigation of trees. The Company contributed to tree planting programmes in Block V. In Block XX, discussions have been held concerning the multi-year local development programme. Whilst this programme is yet to be initiated, pending resolution of the land issue, as a goodwill gesture, Petro Matad together with its subcontractor DQE, funded the restoration of the Matad Soum landfill project.

London South East Webinar, December 2022

The Company will participate in the London South East webinar on 6 December to provide shareholders with an update on Company activity and the progress made in 2022. For those interested in joining the event, the registration link is: https://us02web.zoom.us/webinar/register/9716691130893/WN_sIXgMNagT9-wPQnBAsGhOQ

Mike Buck, CEO of Petro Matad, said:

"It has been a frustrating year for Petro Matad and our shareholders given the lack of progress on the land access issue in Block XX. We are hopeful that we are now reaching a new phase in the process with central government recognising that it needs to bring this access issue to an end through direct action.

Meanwhile, we are pleased with our progress on negotiations with DQE drilling and with the cost reductions that can make a real difference to project cash flows and asset value. Similar positive progress has been made on the Block V Exploration PSC area and we are excited about the potential to drill a high impact exploration well on the Raptor Trend in 2023.

I would like to thank our shareholders for sticking with Petro Matad this year and look forward to sharing further updates."

- Ends -

Petro Matad

Sept 26,2022

[[ Thanks to Malcy's Blog
https://www.malcysblog.com/2022/09/oil-price-angus-energy-longboat-energy-petro-matad-and-finally/
]]


Petro Matad announced on Thursday its unaudited interim results for the six months ended 30 June 2022 and provides an operational update.

Key Company Updates

· The Company has finalised the detailed Heron 1 completion plan with expert engineering input.

· Contract in place with DQE Drilling (DQE) and negotiations underway to substantially expand the size of the programme in order to accelerate development drilling and further reduce costs.

· Heron 1 surface facilities and power generation equipment is either at the border or ready to be shipped from China, subject to Covid-19 related lockdowns.

· Petro Matad continues to push government on the land access issue with the Company urging the Ministry of Mining and Heavy Industry to expedite certification.

Financial Summary 1H 2022

The Group posted a loss of USD 1.62 million for the 6-month period ended 30 June 2022, which compares to a loss of USD 1.02 million for the comparable period in 2021. The Company’s cash balance at 30 June 2022 was USD 6.62 million (USD 3.10 million in cash and USD 3.52 million in Financial Assets), which compares to a cash balance of USD 0.40 million (USD 0.38 million in cash and USD 0.02 million in Financial Assets) on 30 June 2021.

As previously announced, a successful fundraise totalling USD 10.4 million gross proceeds was completed in August 2021 to develop and further appraise the Heron oil field with the goal of commencing production in the second half of 2022. During the first half of 2022, the Company has used part of the proceeds raised to place orders for essential equipment required to put the Heron 1 well into production. The remaining funds received from the fundraise have been invested in relatively safe high yielding term deposits waiting on the ramping up of work programme activities. Throughout, the Company has continued with aggressive cost control measures including maintaining a small but highly active workforce with the necessary operational capability.

Operational Summary 1H 2022

Progress on preparations for operations in 2022 was good through the first half of the year but the Company’s ability to execute was impacted by China’s continuing Covid-19 response and from issues arising from Mongolian land law.

Extremely stringent restrictions imposed by China during the global pandemic to control the spread of Covid-19 were extended into 2022 and have significantly impacted the oil sector in Mongolia where almost all of the oil field service providers are Chinese. Mongolia’s oil export was stopped for most of the first half of 2022 due to the Chinese restrictions. Chinese rigs in Mongolia’s major producing fields were on standby and international border crossings were closed on the Chinese side or severely restricted, complicating and delaying imports and exports. Restrictions began to ease in June and the Chinese contractors in Mongolia were able to gradually restart operations on the country’s main producing fields in the middle of the year.

Petro Matad’s long struggle with local and central government authorities to have its land access rights restored as per the Production Sharing Contract (PSC) and Petroleum Law continued. Contradictions in the Land Law have caused issues for all PSC operators in recent years to varying degrees due to land management regulations introduced in late 2017. The impact of these is particularly prevalent in the province where Mongolia’s major oil fields and Petro Matad’s Heron discovery are located. Multiple requests by the Company and other operators for land access permission have been rejected without explanation by the local authorities. Anticipating this situation at the local level, Petro Matad pushed for central government to take action to certify the Company’s Block XX Exploitation Area as a Special Purpose Area, streamlining the approvals process, and to remedy the contradictions in the land law.

In late April the Cabinet of the Mongolian government gave instruction to the relevant Ministers to expedite matters reflecting the fact that Mongolia has a high-profile project underway to construct a domestic oil refinery that will need Heron production. Additionally, the government’s post-Covid-19 economic recovery plan highlights the importance of the upstream hydrocarbon sector in achieving Mongolia’s goal of greater energy independence. This high-level intervention from the Cabinet was very welcome as progress on the matter has been far too slow. The Company continues to push all governmental bodies involved to generate and maintain the necessary momentum.

During the first half of 2022 and despite the problems impacting the oil sector in-country and in China, Petro Matad pressed ahead with its preparations to be ready to commence field operations as soon as conditions allow. To this end, the company completed geodetic surveying over the Heron development area and prepared detailed construction plans as required by the regulations in place. The Company designed and selected surface production equipment including the Heron 1 beam pump and related equipment plus the necessary power generation package. The equipment orders were successfully tendered and awarded. The Company signed contracts for the downhole completion services for Heron 1 including fracking and the installation of the completion equipment. All environmental permits were approved and in place by mid-year to facilitate the commencement of operations once the land issue is resolved.

Operational Update

Since mid-year there has been further easing of the Covid-19 restrictions in China although some major cities have been put under lockdown when cases are reported. Daqing has been one such city which is home to the PetroChina subsidiary operating in Mongolia and to DQE, Mongolia’s most active oil field drilling contractor. Despite the problems in China, DQE currently has 3 rigs in operation in Mongolia with another scheduled to start soon. Petro Matad has a valid contract with DQE for new wells on Heron with prices reduced compared to 2019. Negotiations are also underway to expand substantially the size of the drilling programme incorporating further price reductions and economies of scale. These discussions have taken much longer than DQE originally proposed due in part to DQE management changes but the negotiations are continuing despite the Daqing lockdown.

Whilst Petro Matad’s field operations remain on hold pending progress on the land issue, the Heron 1 power generation equipment is at the border waiting to cross. The other equipment for Heron 1 that was manufactured in Daqing has been held up by the lockdown but there are indications that the lockdown will shortly be eased or lifted allowing this equipment to be shipped. PetroChina’s Mongolian operating company has offered Petro Matad some storage tanks already in-country at very low cost and discussions are ongoing for other items. Meanwhile, the Company has finalised the detailed Heron 1 completion plan with expert engineering consultant input. Discussions regarding provision of operational services and oil export with PetroChina continue, complicated recently by the Daqing lockdown, but these are planned to resume fully as soon as the relevant PetroChina personal are able to return to Mongolia.

The land issue has yet to reach a resolution. The Company has submitted another application to the local authorities for land access whilst at the same time, in response to pressure from Petro Matad, the legal process for Special Purpose certification is underway at the relevant ministries. Amendments to the Land Law are due to be debated in the next session of the Mongolian parliament and although this represents the best opportunity for an all-encompassing long-term solution, Petro Matad is urging the Ministry of Mining and Heavy Industry, under the newly appointed Minister, to help expedite the special purpose certification for Block XX as a priority in order to allow the Company’s in-field operations to commence as quickly as possible.

Mike Buck, CEO of Petro Matad, said:

“I fully appreciate that the lack of resolution on the land access issue will not be welcomed by shareholders. At this stage we have submitted an additional application to local authorities, are pushing for short and long-term solutions to speed up approval and continue to receive the support of the relevant ministries and the Cabinet of the Mongolian government to expedite the matter. We continue to work, day and night for a resolution.

In the first half of this year, we have made substantial progress on getting our production capability ready in order to ensure we can complete Heron 1 as soon as the land issue is resolved.”

Mike Buck, CEO of Petro Matad was right when he said that the shareholders would not like the lack of resolution on land access issues and how right ne was, the shares fell by some 30%. In a stroke the shares gave back all the recent gains, not quite what was wanted.

For those of us who believed that Mike Buck and his team could deliver the oil from Heron our patience has been tested but I still have faith that now that with eventually Covid retreating in China that progress will be made.

Thanks plumo for posting this information

Interim results for the six months ended 30 June 2022 and Operational Update

LONDON, 22 September 2022: Petro Matad Limited, the AIM quoted Mongolian oil company, announces its unaudited interim results for the six months ended 30 June 2022 and provides an operational update.

Key Company Updates

· The Company has finalised the detailed Heron 1 completion plan with expert engineering input.

· Contract in place with DQE Drilling (DQE) and negotiations underway to substantially expand the size of the programme in order to accelerate development drilling and further reduce costs.

· Heron 1 surface facilities and power generation equipment is either at the border or ready to be shipped from China, subject to Covid-19 related lockdowns.

· Petro Matad continues to push government on the land access issue with the Company urging the Ministry of Mining and Heavy Industry to expedite certification.

Financial Summary 1H 2022

The Group posted a loss of USD 1.62 million for the 6-month period ended 30 June 2022, which compares to a loss of USD 1.02 million for the comparable period in 2021. The Company's cash balance at 30 June 2022 was USD 6.62 million (USD 3.10 million in cash and USD 3.52 million in Financial Assets), which compares to a cash balance of USD 0.40 million (USD 0.38 million in cash and USD 0.02 million in Financial Assets) on 30 June 2021.

As previously announced, a successful fundraise totalling USD 10.4 million gross proceeds was completed in August 2021 to develop and further appraise the Heron oil field with the goal of commencing production in the second half of 2022. During the first half of 2022, the Company has used part of the proceeds raised to place orders for essential equipment required to put the Heron 1 well into production. The remaining funds received from the fundraise have been invested in relatively safe high yielding term deposits waiting on the ramping up of work programme activities. Throughout, the Company has continued with aggressive cost control measures including maintaining a small but highly active workforce with the necessary operational capability.

Operational Summary 1H 2022

Progress on preparations for operations in 2022 was good through the first half of the year but the Company's ability to execute was impacted by China's continuing Covid-19 response and from issues arising from Mongolian land law.

Extremely stringent restrictions imposed by China during the global pandemic to control the spread of Covid-19 were extended into 2022 and have significantly impacted the oil sector in Mongolia where almost all of the oil field service providers are Chinese. Mongolia's oil export was stopped for most of the first half of 2022 due to the Chinese restrictions. Chinese rigs in Mongolia's major producing fields were on standby and international border crossings were closed on the Chinese side or severely restricted, complicating and delaying imports and exports. Restrictions began to ease in June and the Chinese contractors in Mongolia were able to gradually restart operations on the country's main producing fields in the middle of the year.

Petro Matad's long struggle with local and central government authorities to have its land access rights restored as per the Production Sharing Contract (PSC) and Petroleum Law continued. Contradictions in the Land Law have caused issues for all PSC operators in recent years to varying degrees due to land management regulations introduced in late 2017. The impact of these is particularly prevalent in the province where Mongolia's major oil fields and Petro Matad's Heron discovery are located. Multiple requests by the Company and other operators for land access permission have been rejected without explanation by the local authorities. Anticipating this situation at the local level, Petro Matad pushed for central government to take action to certify the Company's Block XX Exploitation Area as a Special Purpose Area, streamlining the approvals process, and to remedy the contradictions in the land law.

In late April the Cabinet of the Mongolian government gave instruction to the relevant Ministers to expedite matters reflecting the fact that Mongolia has a high-profile project underway to construct a domestic oil refinery that will need Heron production. Additionally, the government's post-Covid-19 economic recovery plan highlights the importance of the upstream hydrocarbon sector in achieving Mongolia's goal of greater energy independence. This high-level intervention from the Cabinet was very welcome as progress on the matter has been far too slow. The Company continues to push all governmental bodies involved to generate and maintain the necessary momentum.

During the first half of 2022 and despite the problems impacting the oil sector in-country and in China, Petro Matad pressed ahead with its preparations to be ready to commence field operations as soon as conditions allow. To this end, the company completed geodetic surveying over the Heron development area and prepared detailed construction plans as required by the regulations in place. The Company designed and selected surface production equipment including the Heron 1 beam pump and related equipment plus the necessary power generation package. The equipment orders were successfully tendered and awarded. The Company signed contracts for the downhole completion services for Heron 1 including fracking and the installation of the completion equipment. All environmental permits were approved and in place by mid-year to facilitate the commencement of operations once the land issue is resolved.

Operational Update

Since mid-year there has been further easing of the Covid-19 restrictions in China although some major cities have been put under lockdown when cases are reported. Daqing has been one such city which is home to the PetroChina subsidiary operating in Mongolia and to DQE, Mongolia's most active oil field drilling contractor. Despite the problems in China, DQE currently has 3 rigs in operation in Mongolia with another scheduled to start soon. Petro Matad has a valid contract with DQE for new wells on Heron with prices reduced compared to 2019. Negotiations are also underway to expand substantially the size of the drilling programme incorporating further price reductions and economies of scale. These discussions have taken much longer than DQE originally proposed due in part to DQE management changes but the negotiations are continuing despite the Daqing lockdown.



Whilst Petro Matad's field operations remain on hold pending progress on the land issue, the Heron 1 power generation equipment is at the border waiting to cross. The other equipment for Heron 1 that was manufactured in Daqing has been held up by the lockdown but there are indications that the lockdown will shortly be eased or lifted allowing this equipment to be shipped. PetroChina's Mongolian operating company has offered Petro Matad some storage tanks already in-country at very low cost and discussions are ongoing for other items. Meanwhile, the Company has finalised the detailed Heron 1 completion plan with expert engineering consultant input. Discussions regarding provision of operational services and oil export with PetroChina continue, complicated recently by the Daqing lockdown, but these are planned to resume fully as soon as the relevant PetroChina personal are able to return to Mongolia.



The land issue has yet to reach a resolution. The Company has submitted another application to the local authorities for land access whilst at the same time, in response to pressure from Petro Matad, the legal process for Special Purpose certification is underway at the relevant ministries. Amendments to the Land Law are due to be debated in the next session of the Mongolian parliament and although this represents the best opportunity for an all-encompassing long-term solution, Petro Matad is urging the Ministry of Mining and Heavy Industry, under the newly appointed Minister, to help expedite the special purpose certification for Block XX as a priority in order to allow the Company's in-field operations to commence as quickly as possible.



Mike Buck, CEO of Petro Matad, said:

"I fully appreciate that the lack of resolution on the land access issue will not be welcomed by shareholders. At this stage we have submitted an additional application to local authorities, are pushing for short and long-term solutions to speed up approval and continue to receive the support of the relevant ministries and the Cabinet of the Mongolian government to expedite the matter. We continue to work, day and night for a resolution.

In the first half of this year, we have made substantial progress on getting our production capability ready in order to ensure we can complete Heron 1 as soon as the land issue is resolved."



Further operational updates will be provided in due course.

Thanks for posting plumo

Today update from ceo mike buck.

Nice rise

Petro Matad has provided the following operational update.

May 5, 2022

[[ Thanks to Malcy's blog ]]

https://www.malcysblog.com/2022/05/oil-price-petromatad-petrofac-ceag-and-finally/

The recent increase in Covid-19 related lockdowns and travel restrictions in China continue to impact Mongolia at a time when it was hoped there would have been significant relaxation. China is maintaining tight control on movement across its borders and there are currently no signs that these controls will be relaxed in the short term. This is impacting all businesses in Mongolia that rely on cross-border trade including the oil field service providers. PetroChina’s export of Mongolian oil production across the border into China is also suspended because of the Covid-19 controls and there are no Chinese oil rigs operating in Mongolia at the moment.

Block XX Exploitation Area

Petro Matad has continued to engage with local and central Government to secure all necessary permits. Local officials remain reticent to discuss applications due to lobbying on social media by a vocal minority protesting against industrial activity. This included at a recent local meeting when allegations were made about the Company’s Environmental Impact Assessment despite the fact it was prepared as per the regulations and has been approved by the Ministry of Environment.

For issues that cannot be resolved locally, Petro Matad has sought input from central government and this strategy has resulted in progress on the long-running land issue. In late April, the Cabinet of the Mongolian Government issued a resolution directing the certification of exploration and exploitation licences by the central Land Agency such that local approvals on land use are not required. We are advised by industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), that this will allow work on all Production Sharing Contracts (PSCs) areas to progress without land access delays whilst the planned amendments to the land law that will remove the current legal ambiguities pass through parliament. We are pushing to secure the land certificates on Block XX and V as a matter of urgency. We will follow a similar strategy with the central Government if required to ensure there is no impact on our already completed environmental permitting.

With the Covid-19 situation in China causing operational delays in Mongolia, the Company continues to prioritise its efforts to get Heron 1 on stream. The contract with the chosen well completions contractor is in final form. We are seeking confirmation that equipment and crews for the completion and readying for production of Heron 1 are available as soon as we are ready to mobilise. It is our operational preference that as soon as the well is stimulated and completed it should immediately be put on production. The current suspension of all oil production and export from PetroChina’s Blocks XIX and XXI and with all on site storage full means that we need oil export to restart in order to optimise the start-up sequencing on Heron 1.

In anticipation of the situation improving, Petro Matad has placed orders for surface production equipment for the Heron 1 well and discussions with PetroChina, on the use of its production facilities are progressing well. We are also in discussion to buy or rent equipment from PetroChina Mongolia to avoid the need for, and current uncertainty of, importation.

Discussions with MRPAM on oil processing, transport and sales options were concluded with their full support and we are now in discussion with PetroChina’s Mongolian affiliate on the commercial details of sharing infrastructure and logistics.

Technical and operational cooperation, Block XX

In parallel with operational preparations for the 2022 programme, Petro Matad continues to work with DQE Drilling (DQE) on its proposal to enter into a cooperation agreement that could accelerate Heron Field development activities. Petro Matad has supplied a multi-year target work programme and this is under review in DQE’s headquarters.

Block V Exploration PSC

The Cabinet resolution on land access will assist in securing the necessary permits to allow the Company to work on the Raptor Trend. Having identified an in-country drilling contractor with equipment and experience in drilling to the target depth required on the Velociraptor prospect, we are now in discussion on potential rig availability and well cost.

Mike Buck, CEO of Petro Matad, said:

“China’s zero Covid-19 policy is having major impacts not only within China but also on Mongolia. Our preparations to operate are progressing well but, with uncertainty on when drilling operations in country will recommence, we are focusing as a priority on Heron 1 completion and production.

We are very pleased with the outcome of the Cabinet meeting held last week. The restoration of land use rights under the PSC is an important and necessary step, and we will continue to work with the local, district and provincial authorities to underline our intention to be a partner whose activities can continue to bring benefits to the communities in which we operate.

I would also like to personally thank our shareholders for their continued patience and support while we work to get Heron 1 on stream and implement our broader 2022 work programme.”

You couldn’t make it up, the bad luck that has rained on Mike Buck and his team at MATD recently but at least is is surely transitory and that the company is doing everything they possibly can to be ready to move fast to ensure that Heron 1 will be up and producing as soon as is possible.

I have written a good deal about China’s current woes in recent blogs but in the oil price section as the lockdowns in Shanghai and more recently Beijing have concerned markets with regard to Chinese economic growth. Now we have evidence of more micro problems and to add to the Covid problems they now have social media warriors getting involved.

Despite all this I remain confident that Mike and team will overcome the problems and backed by the Government will before long get Heron 1 on stream and get the longer term programme up and running, this is no time for faint hearts…

Matad should see more sp appreciation

And we are still waiting for news.Waiting and waiting for the first oil to be produced.Will it happen in the 2nd quarter.have my doubts about that.But it has to happen soon!!!!!!!
good luck to everyone who has had the stock for many years like me!

Matad could turn out to be a winner

Thank for the update plumo

soon it will be the turn of the ceo of petro matad: mike buck who will talk
https://www.lse.co.uk/events/

Hope you are right on this one too Tamtam!

Petro Matad

[[ Thanks to Malcy's Blog ]]

Read at:
https://www.malcysblog.com/2021/12/oil-price-petro-matad-orcadian-and-finally/

December 7, 2021

Petro Matad has provided the following operational update. In Block XX Exploitation Area The Mineral Resources and Petroleum Authority of Mongolia (MRPAM) and Petro Matad held the first Exploitation Meeting at which it was agreed that the technical details of the benchmarking and pricing of Heron crude should be finalised between the Company and MRPAM by year-end. This will then allow for contract negotiations with potential buyers to begin. Mongolian crudes have been priced benchmarked to both Brent and Daqing crudes over the years. The Heron 1 assay is Brent-like in its chemistry and so Petro Matad is pushing for benchmarking to Brent in discussions with MRPAM and, once agreed, plans to do so in the follow up negotiations with potential crude oil buyers early in the New Year.

Contracting negotiations with drilling, well completion and infrastructure services providers are at an advanced stage with contract awards anticipated in good time for the start of the operational season in Q2 2022. Operations will focus on the completion of the Heron-1 discovery as a production well and the drilling of additional production wells within the current 3D seismic footprint.

The Company received a good response to its invitation to tender for 3D seismic and favourable terms were negotiated with the winning contractor. However, current Covid-19 restrictions ruled out being able to mobilise quickly for a winter 21/22 shoot. The winning bidder’s tender is valid through 2022 and as such, depending on progress with the drilling programme, Petro Matad will review the timing of 3D seismic operations in the second half of the coming year. All development well locations short listed for Heron phase 1 development drilling are within the area covered by existing 3D seismic so the timing of the acquisition of the new survey is not critical.

A number of administrational requirements to register the new Exploitation Area have been completed with the cooperation of various government ministries. Petro Matad has also led an industry effort in cooperation with other operators in country to submit proposed changes to the laws and regulations governing the petroleum sector with a view to improving the investment climate. In addition, Petro Matad is working with Mongolia’s Professional Inspection Agency to revise the check lists used for signing off on any new upstream oil and gas installations. Petro Matad has also made firm proposals to central government on how best to resolve the conflicts within Mongolian law on land access and usage. Whilst it is hoped these will generate workable changes to the legislation, in parallel Petro Matad is working with local government to guarantee access to all the sites that could possibly be used by the Company in 2022.

The Block V exploration PSC in central Mongolia remains a keen focus of the Company with a number of very attractive, low cost, high impact prospects identified. Petro Matad is in discussion with drilling contractors to determine the potential timing and costs of drilling operations on the Velociraptor trend. The Company is also progressing the final stage of its environmental impact assessment in order to be able to operate on Block V in 2022 and beyond. This work had been held up due to Mongolia’s restrictions on meetings being held during the pandemic, but a pragmatic work around has been agreed by all parties and the Company hopes to submit its documentation to the Ministry of Environment before year end with the expectation of approval of the environmental impact assessment in Q1 2022.

Petro Matad’s efforts to partner with local and/or foreign companies on development and exploration activities in Mongolia continue and the Company has a virtual data room running at the moment. Whilst the Company is pushing the receiving parties to act quickly in completing their evaluations, Petro Matad continues to make 2022 operational preparations in parallel which will be executed with or without partners.

Petro Matad is also pursuing a strategy to work up and sign new exploration/appraisal areas in Mongolia and has high graded two areas of interest to date for which the Company plans to submit acreage applications.

The Board of Petro Matad has taken the decision to seek to expand the Company’s activities in Mongolia into sustainable and renewable energy in addition to its ongoing work in the oil and gas sector.

Work has been done this year to determine the status of the renewable energy sector in country, as Mongolia has substantial potential for both wind and solar power generation. A number of projects that have government support to execute have been identified and are being evaluated for accessibility and commercial potential.

In addition, Petro Matad is looking at renewable energy possibilities to deploy in its Heron oilfield development. The area around Heron is well suited to both wind and solar power generation. Petro Matad is also studying the potential to use CO2 injection as an enhanced oil recovery mechanism for the Heron development. This technique has been widely used around the world for many years and has proven particularly successful in some of the larger oil field developments onshore in northern China. It has not been deployed in Mongolia where water injection has traditionally been used for reservoir pressure maintenance. Southern Mongolia is effectively covered by desert steppe and water is an increasingly precious resource. As such, an alternative to large scale water usage in oil production operations is considered a goal worth pursuing. Technical studies are now underway to determine the potential effectiveness of CO2 injection into the reservoirs of the Tamsag Basin.

Mike Buck, CEO of Petro Matad, said:

“We are delighted to have concluded our first Exploitation Meeting and are looking forward to beginning contract negotiations with potential buyers for Heron production. Additionally our recent decision to expand our activities into sustainable and renewable energy is an exciting new frontier for us that we look forward to updating investors on in the coming months.

The Company is on target to be ready for an active operational programme in 2022 focused on achieving the start of production from the Heron discovery. A lot of progress has been made over the last few months despite the challenges of the ongoing pandemic and the efforts of our dedicated staff are very much appreciated.”

Petro Matad are turning the corner in Mongolia and this extended and detailed update today certainly gives scope for optimism in a number of key areas. Whilst the market had been hoping to see some drilling by now I think that has always been a rather optimistic shout for obvious reasons but clearly there is a wall of complications before first production in Q2 2022.

The raise in July of this year took all the wind and more out of the share price and that is not likely to change until either of a farm-out or Heron production is underway. As for expanding into sustainable and renewable energy I think that the jury will be out until we hear the promised investor update in coming months, I’m not for one minute suggesting they are not up to it but shareholders will want to be persuaded. Either way MATD management is high quality and 2022 will be shaped by what they say in the spring.

Matad trading sideways for months now. About time we see a boost in sp with current oil prices

https://www.proactiveinvestors.com/companies/news/963758/petro-matad-production-plans-for-2022-after-exploitation-licence-for-block-xx-in-eastern-mongolia-963758.html