REG - Petro Matad Ltd - Final results for year ended 31 December 2024
26/06/2025 07:00
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RNS Number : 4596O Petro Matad Limited 26 June 2025
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26 June 2025
Petro Matad Limited
("Petro Matad" or the "Company")
Final results for year ended 31 December 2024
Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian
oil company, announces its audited final results for the year ended 31
December 2024. All monetary values are expressed in United States dollars
unless otherwise stated.
2024 Operational Highlights
· The Company successfully began oil production from its Heron-1
discovery well in October 2024, which was a significant milestone after
continued negotiations with Ministry of Industry and Mineral Resources (MIMR)
and Mineral Resources and Petroleum Authority of Mongolia (MRPAM)
· The Heron-2 well spudded on 8 September 2024 and although drilling
results were encouraging, on test the productive potential was significantly
lower than rates observed at Heron-1. The well was suspended pending further
analysis. The Gobi Bear-1 exploration well was also drilled with ambiguous
results and a zone of interest is the subject of further study.
· In 2024, Sunsteppe Renewable Energy (SRE) increased its portfolio
with the addition of two new high-graded projects. The portfolio now includes
the 24MW Oyu Tolgoi (OT) mine Green Hydrogen demonstration project; the Choir
50MW Battery Energy Storage System; a 1,500MW export to China project and a
200MW Hybrid project associated with an operating power plant, all of which
offer double digit rates of return.
· The Company participated in Mongolia's Exploration Licensing round
and awards were still pending at year-end. Block VII, the Company's top-ranked
block, was awarded to Petro Matad on 16 January 2025.
Mid-2025 operational update
· Heron-1 has continued to produce through 2025 initially on natural
flow and now using artificial lift and to date the well has produced over
45,000 barrels.
· An oil sales agreement was signed with neighbouring operator
PetroChina and Petro Matad received the first payment for production in June
2025. A 30% revenue withholding pending confirmation on certain potential
concerns raised by PetroChina is being addressed as a priority.
· Work on Block VII is underway with encouraging results so far. Data
on the seismic and drilling operations by the previous operator are being
incorporated into the Company's first phase evaluation.
· The Company's renewable energy joint venture, Sunsteppe, continues to
work on its four high-graded projects and is in discussion with debt providers
and potential equity partners.
· Recognising an improvement in the business environment in Mongolia,
Petro Matad has stepped up efforts to find farm-in partners for its upstream
oil projects in order to accelerate development and production with the goal
of increasing shareholder value.
2024 Financial Highlights
· During 2024 the Company executed an oversubscribed equity raise for
gross proceeds of $9.4 million to fund its 2024 work programme.
· As of 31 December 2024, the Group's cash position was $3.65 million
(inclusive of Financial Assets) (31 December 2023: $4.5 million).
· The Group's net loss after tax for the twelve months ended 31
December 2024 was $10.92 million (31 December 2023: loss $5.9 million).
Mike Buck, CEO of Petro Matad, said:
"After many years, 2024 finally saw Petro Matad start oil production from the
Heron-1 well so becoming only the third producer in the country. While the
Heron-2 well did not meet our expectations, we are working on a programme to
determine the potential of the well as an oil producer or alternatively as a
water injector.
Our renewables joint venture, Sunsteppe, made good progress in 2024 and the
portfolio includes projects ranging from 24MW to 1,500MW. The Mongolian
government has prioritised energy independence and is focused on progressing
renewable energy export to China. Sunsteppe is well placed to be a serious
player in this sector.
We are aware and appreciative of our shareholders' patience through the delays
our projects have suffered and of their continuing support."
About Petro Matad
Petro Matad is the parent company of a group focused on oil exploration,
development and production in Mongolia. Currently, Petro Matad holds a 100%
working interest and the operatorship of the Matad Block XX Production Sharing
Contract with the government of Mongolia. Block XX has an area of 214 square
kilometres in the far eastern part of the country. The Company also holds a
100% working interest and operatorship of the Borzon Block VII Production
Sharing Contract with an area of 41,141 square kilometres in southern central
Mongolia.
Petro Matad Limited is incorporated in the Isle of Man under company number
1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle
of Man, IM1 1EQ.
Further information please contact:
Petro Matad Limited
Mike Buck, CEO +976 7014 1099 / +976 7575 1099
Shore Capital (Nominated Adviser and Broker)
Toby Gibbs +44 (0) 20 7408 4090
Harry Davies-Ball
Zeus (Joint Broker) +44 (0) 20 3829 5000
Simon Johnson
Louisa Waddell
FTI Consulting (Communications Advisory Firm)
Ben Brewerton +44 (0) 20 3727 1000
Christopher Laing
Annual Report and Accounts
The Company's statutory annual report and accounts will be dispatched
electronically to shareholders shortly and will be posted to shareholders who
have elected to receive hard copies of the Annual Report. Additional copies of
the Annual Report may be requested directly from the Company and an electronic
copy will be available on the Company's website www.petromatadgroup.com
(https://url.avanan.click/v2/___http:/www.petromatadgroup.com___.YXAxZTpzaG9yZWNhcDphOm86NjI0NDc4NjA4NmE1YWRlMzFkZmRlN2ZjMWNkZTRjN2Q6NjplMjIxOjI1N2UxNjFkMWMxOTI2MGQxMGM1YTE0ZDYyMTE1MDExZGJiNTVlYmY3NzY2OTlkMmM2YjgwNDE5MmJjYzRkYmE6cDpU)
.
Annual General Meeting ("AGM")
A notice of the Company's AGM will be distributed in due course and made
available on the Company's website www.petromatadgroup.com
(https://url.avanan.click/v2/___http:/www.petromatadgroup.com___.YXAxZTpzaG9yZWNhcDphOm86NjI0NDc4NjA4NmE1YWRlMzFkZmRlN2ZjMWNkZTRjN2Q6NjplMjIxOjI1N2UxNjFkMWMxOTI2MGQxMGM1YTE0ZDYyMTE1MDExZGJiNTVlYmY3NzY2OTlkMmM2YjgwNDE5MmJjYzRkYmE6cDpU)
.
Directors' Statement 2024
Summary
2024 was a transformational year for Petro Matad, with the Company becoming
the third oil producer in Mongolia, with the startup of production operations
in Block XX in eastern Mongolia, adding to the Company's traditional
exploration activities. Delays that the Company had suffered in previous years
were resolved with decisive input from the government and this heralded a push
by the authorities to improve the business environment in the oil sector and
the energy sector in general. The Company was navigating a number of Mongolian
regulatory processes for the first time and we hope that this ground-breaking
experience will ease the process for future business collaboration with the
government.
During the reporting period in 2024, the Company had a busy operational year
and achieved a significant milestone with first oil produced from the Heron-1
discovery well. This was achieved with the support of both local and central
government agencies and Ministries in overcoming land access and various
construction permitting issues. While still waiting for State Special Purpose
certification of Block XX from central government, an agreement was made with
Matad Soum allowing access to the area of the Heron-1 well pad and also at the
planned Heron-2 and Gobi Bear-1 well locations. With these permissions
in-place, the completion of Heron-1 as a production well was completed by
early August. Installation of the surface facilities was threatened with
further delay until the Minister of Industry and Mineral Resources and the
Minister of Construction and Urban Development took action to amend relevant
construction permitting regulations allowing the Heron-1 surface facilities to
be installed and first oil to flow on 24 October. Initial production rates
from the well were as expected at 200-250 bopd with oil being transported to
PetroChina's processing facilities in Block XIX 20km to the north for storage
prior to export. With production commenced, discussions with PetroChina to
finalise an Oil Sales Agreement involving processing, transportation and sale
finally gained some traction with the counterparty and the principles of
the contract were largely agreed by year-end.
Post the reporting period, the Oil Sales Agreement was signed and in June 2025
Petro Matad received the first payment for commercial sale of its production
from Block XX and whilst there are still some issues raised by the
counterparty to resolve, the Company looks forward to routine monthly payments
under the agreement going forward.
In parallel with completion and production operations at Heron-1, drilling
activities at the Heron-2 appraisal well and the Gobi Bear-1 exploration well
using funds raised in mid-2024 commenced on 8 and 21 September respectively
using two rigs and drilling crews from DQE International. Heron-2 was located
a little less than 1km to the south of Heron-1 with the expectation of
encountering a similar reservoir thickness and quality as at Heron-1. While a
thicker reservoir section was encountered up dip of the depth in Heron-1 and
with oil shows observed, on test the well did not achieve commercial flow
rates following stimulation and was suspended in mid-November pending
evaluation of the well data. Initial assessment pointed to a reduction in
reservoir permeability in the Heron-2 section being the reason for the low oil
rate. This was the primary risk recognised before drilling as reservoir
variability is well known and documented in the basin in neighbouring blocks.
Gobi Bear-1 was located some 13km to the southwest of the Heron-1 discovery
targeting the same age reservoir within a large combination
structural/stratigraphic trap formed by shallowing and thinning of sediments
towards the basin margin. The well encountered a good quality, thick reservoir
sequence but with only patchy oil shows. However, petrophysical evaluation
identified a possible zone of interest and the well was suspended in early
October without testing pending geochemical analysis of well cuttings aimed to
determine if moveable oil is present within the reservoir section.
It is a reflection of the professionalism and dedication of Petro Matad staff
that the simultaneous operations of completing Heron-1 and installing
facilities, drilling and testing Heron-2 and drilling Gobi Bear-1, were
successfully completed without any environmental or safety incidents occurring
and with the work done on time and within budget.
The Company's central Mongolian exploration acreage, Block V, was returned to
the government at the end of July upon the expiry of the exploration term with
all work commitments fulfilled and all required documentation shared with the
Mineral Resources and Petroleum Authority of Mongolia (MRPAM) and relevant
Ministries. The establishment of a government working group to approve the
relinquishment is the last step of the process and this was ongoing at
year-end.
The Company's applications for two blocks offered in Mongolia's Exploration
Licensing round were still pending at year-end with the area of one of the
blocks still yet to be finalised. Block VII, the Company's top-ranked block,
was awarded to Petro Matad on 16 January 2025.
Sunsteppe Renewable Energy (SRE), the Company's renewables Joint Venture was
very active through the year and identified several attractive project
opportunities. The two exclusively held projects high-graded in 2023 advanced
in 2024 working through the permitting and detailed design stages and are
continuing to progress. Numerous other initiatives were generated by the
renewables team with exclusivity on two more projects being achieved in
2024/25.
2024 Review
Permitting: Block XX Exploitation Area - Land access
The land access dispute that hitherto had prevented the Company's access to
the Heron development location since late 2019 was finally resolved locally
with an agreement reached with the Matad Soum and land agencies. Discrete
areas around the Heron-1 well site and the location of the planned Heron-2 and
Gobi Bear-1 wells required to allow Petro Matad to conduct operations were
approved on 27 May 2024 for a five year period. This was in parallel with the
State Special Purpose land certification process that continued to be
addressed by central government and was still ongoing at year-end.
Certification was finally achieved post the reporting period on 5 February
2025, making Block XX the first oil exploitation area in Mongolia to have been
given State Special Purpose status. The newly appointed Minister of Industry
and Mineral Resources finalised the Tripartite Agreement with the Provincial
Governor, the absence of which had been holding up operations and the State
Special Purpose certificate was issued by the Central Land Agency. Under the
Land Law, as State Special Purpose land, it will be the responsibility of the
Ministry of Industry and Mineral Resources (MIMR) to secure the land access
for all areas within the Block XX Exploitation Area required for operations
and thus a much more streamlined process in securing land access is expected
in future. This expectation was born out in the first quarter of 2025 when
land access was granted without obstruction for two new areas of potential
operation in Block XX.
Health Safety Security and Environment (HSSE)
The HSSE Management System (HSSE MS) of the Company is designed to adhere to
best practices set by the International Association of Oil and Gas Producers
(IOGP).
According to Mongolian national and international best practices, all reported
HSSE incidents are thoroughly investigated, documented, and classified in
accordance with IOGP guidelines. Moreover, the lessons learned from these
incidents are openly shared through the management review process. The Company
is pleased to report that Petro Matad, together with its sub-contractors,
adhered to all Mongolian laws and national standards throughout its 2024
operations. Importantly, there were no environmental incidents, lost time
incidents, or recordable incidents during the year. We are pleased to report
that the Dornod Aimag Environment Committee awarded Petro Matad an overall
score of 97% on the Block XX Environmental Implementation Report for
operational year 2024, which is the highest score ever granted to any company
operating in Dornod Province.
The Company is fully committed to environmental protection and consistently
strives to implement all necessary measures to fully comply with national and
international best practices, with ISO 14001 serving as the benchmark.
With Petro Matad transitioning to become a producer, it was essential that all
aspects of the production operations -including personnel conduct, equipment
integrity, and environmental safeguards- would be managed in strict compliance
with both Mongolian national legislation and applicable international safety
standards. All production and supporting equipment at the Heron-1 wellsite are
maintained under a routine servicing and preventative maintenance schedule,
fully in accordance with the original manufacturers' specifications. This
ensures optimal functionality, prolongs equipment lifespan, and mitigates
risks related to mechanical failure, emissions, and operator safety. In line
with Mongolian regulatory requirements, comprehensive safety and operational
signage has been installed across the production site. This includes clearly
displayed hazard warnings, safe operating procedures, emergency contact
information, and access restrictions, all of which promote situational
awareness and guide safe conduct on-site.
Operator activities are carried out in strict accordance with Mongolia's
Occupational Health and Safety (OHS) regulations. Where relevant, operational
practices are also aligned with international best practices as outlined by
IOGP, reinforcing our commitment to globally recognized safety benchmarks.
Operations
Block XX: The Company had contracts in place and equipment procured in
readiness for when access to land was agreed and operations at Heron-1 could
be commenced. With the agreement with the Matad Soum finalised on 27 May 2024
that allowed access and operations to commence at the Heron-1 wellsite and at
the Heron-2 and Gobi Bear-1 well locations, the Company immediately issued
mobilisation notices to DQE International and related subsidiaries for a
testing rig, two drilling rigs and well testing and stimulation equipment for
the planned 2024 programme. At Heron-1, completion operations started on 22
July and a reservoir stimulation programme was successfully performed which
confirmed the reservoir's potential for commercial flow rates even after a
shut-in period of 5 years. The production string and wellhead were installed
by 15 August in readiness for the installation of the surface equipment. Being
the Company's first installation of oil production facilities it became
apparent when seeking construction permit approval that the existing
regulations did not address oil production facilities and that they required
updating. The Company was actively pursuing this process with representations
to the Ministry of Construction and Urban Development (MCUD) but in parallel,
with the assistance of the Minister MIMR and the Minister MCUD the regulations
were updated on 30 September 2024 significantly streamlining the approvals
process. This then allowed the Company to proceed with installation of
production facilities which were completed on 24 October when first oil was
produced from the Heron-1 well. The Company was pleased to be able to recruit
production operators from the local communities and a field-based Production
Operations team was established to oversee production operations and crude
transportation.
Initial well production rates were in line with expectations with the well
capable of producing under natural flow and with low water cut. Produced crude
oil is transported to PetroChina's Block XIX TA-1 oil facility some 20km to
the north for processing and storage prior to export to Chinese refineries. By
year-end there were c.13,000 barrels of crude in storage awaiting export once
the Oil Sales Agreement between the Company, and PetroChina was in-place.
In parallel to operations at Heron-1, the planned drilling activities at
Heron-2 and Gobi Bear-1 commenced on 8 and 21 September respectively using two
rigs and drilling crews from DQE International. Heron-2 was located a little
less than 1km to the south of Heron-1 with the expectation of encountering a
similar reservoir thickness and quality as at Heron-1. The well reached Total
Depth (TD) of 2,908m in just 16 days after spud and following wireline
logging, casing was run to TD and 8m of perforations were made in the casing
across the identified reservoir section. The reservoir was then successfully
stimulated but it became apparent during the flow-back operations that flowing
rates were significantly lower than those observed in Heron-1. Subsequently
swabbing operations recovered oil but at low volumes. Although a thicker
reservoir section, up dip of Heron-1 was encountered with similar wireline log
derived porosities it appeared that there is a marked reduction in reservoir
permeability in Heron-2 and hence the low oil rate achieved. Such variation in
reservoir quality is a known uncertainty in the basin and post-well studies
were initiated to attempt to understand the result at Heron-2. The well was
suspended on 16 November pending future operations, re-testing and/or water
injectivity testing in the 2025 operational season.
Gobi Bear-1 was an exploration well located some 13km to the southwest of the
Heron-1 and Gazelle-1 discoveries targeting the same age reservoir within a
large combination structural/stratigraphic trap formed by shallowing and
thinning of sediments towards the basin margin. The well was drilled with a
smaller rig than that used at Heron-2 given the shallower targets. TD was
reached at 1805m on 2 October in just 11 days and encountered a thick
sandstone section within which wireline logging confirmed a total of 34m of
reservoir quality sandstones within a gross interval of 70m between 1,558m and
1,628m and computed to have 13% average porosity which is consistent with the
productive reservoirs in the basin. The resistivity log profile suggested the
sands may contain a hydrocarbon charge. Oil shows were however only patchy
across this interval casting some doubt on the presence of moveable oil in the
well. The well was suspended without testing and the rig released on 5
October. Subsequent geochemistry work on drill cuttings has concluded that
migrated oil is present in the well and this is a positive result although it
is not definitive and work continued beyond the reporting period including
reviewing the log interpretation to determine the forward programme for the
well.
Block V: The exploration term for this block expired on 29 July 2024. The
Company fulfilled and exceeded the contractual obligations on the block and
supplied MRPAM with all relevant documentation and completed restoration works
at the Velociraptor-1 well site. A working group comprising representatives of
MRPAM, MIMR and other agencies was established to give the final approval for
the return of the acreage to the State and their work was ongoing at year-end.
2024 Exploration Licencing Round
The Company submitted applications for two blocks offered in the MRPAM
promoted exploration licensing round. Working groups, comprising experts from
MRPAM and MIMR were established and the Company successfully completed
negotiations on the terms of the PSC and work programmes for each block. The
Company focused on blocks in Mongolia that contain extensions of basins proven
productive for oil across the international border in China. The government's
approval process for the award of new exploration licences continued through
2024 and was ongoing at year-end. As subsequently reported, the Company was
awarded Block VII on 16 January 2025 located in southernmost Mongolia. This
was the Company's top-ranked block having extensions of plays proven in
adjacent Chinese basins. The initial work programme comprises field work and
desk-top studies and these are ongoing in parallel with the formalities
required to secure the formal government approved Exploration Licence.
Sunsteppe Renewable Energy (SRE)
The Company's renewable energy vehicle, Sunsteppe Renewable Energy (SRE), made
very good progress through the year. The feasibility study for the Green
Hydrogen demonstration project for Oyu Tolgoi mine was completed and submitted
to Oyu Tolgoi. The Choir 50MW/150MWh battery energy storage facility in
central Mongolia is also progressing.
SRE's small but active team has made a big impact in-country and with
potential international partners and lending banks. With the government's new
focus on renewable energy projects including large export to China
opportunities, SRE's opportunity set has grown to the extent that in 2024 it
added two new exclusive projects to its portfolio. One is a 1.5GW export to
China project in collaboration with a major Chinese utility. The other is a
200MW hybrid wind/solar project. These sizeable projects show the potential of
the renewables sector in Mongolia and with its growing connections, SRE is
well-placed to take a leading role in the Mongolian renewable energy project
development market.
Community Relations
The Company takes its responsibilities in community engagement and community
relations very seriously. In advance of any work programme activity being
undertaken, the Company ensures that it obtains the necessary approvals from
MRPAM and all other relevant authorities. Company staff participate in joint
meetings with the regulator and the local communities to present and discuss
planned activities. In addition to meeting local government officials, the
socialisation programmes will typically include town hall meetings where
questions from local residents are answered. Company representatives will also
meet with nomadic herders who may be in proximity to planned operations to
ensure all parties are listened to. Representatives from the Relations team
are stationed at site during all operational activities.
A focused programme of community projects is undertaken in areas where
operations are conducted, and this is done in cooperation with local
government. The Company views engagement with local communities as key to
conducting safe and successful operations that will in turn benefit the local
area.
Social impact
In the winter of 2023-2024, Mongolia experienced severe winter conditions,
known as dzud, particularly in the eastern provinces, including Dornod
province. Petro Matad financed a donation including 132 tonnes of fuel,
wrapped hay, livestock cover blankets, winter working gloves and food supplies
under our corporate social responsibility awareness programme. These donations
were handed over to the Emergency Commission of Matad Soum who were
responsible for the distribution of the goods to Matad Soum residents impacted
by the dzud.
In conjunction with the 100(th) year anniversary of Matad Soum's
establishment, celebrations were held and Petro Matad funded the construction
of a basketball court and children's playground with the work being executed
by a local company.
Conclusions
In the first half of 2024 the Company vigorously pursued solutions to the
Block XX land access issue working closely with MRPAM, MIMR and local
communities. The securing of local land approvals in 2024 enabled the Company
to carry out its intended work programme through the second half of the year.
The highlight of this activity was putting onstream and start up of oil
production from the Heron-1 discovery well. Heron-2 delivered a result that
was below expectation but work continues to determine the best use for this
well. Gobi Bear-1 demonstrated once again that small rigs can be used for
highly cost-effective operations on shallower wells and the ambiguous result
is intriguing. The Block XX 2024 operations were completed within budget,
without any HSSE incident and with excellent cooperation with the local
community which is a significant achievement for the Company's Mongolian staff
especially given the adversities faced in the region in previous years. With
the award of Block VII in January 2025, the Company is looking forward to high
grade the prospectivity of the block for an impactful exploration programme in
future years.
The improvement in the business environment in Mongolia in 2024 with
government taking a more proactive approach particularly in the energy sector
highlighted the opportunities to the Company of looking to bring in partners
to accelerate oil production operations and enhance shareholder value. This is
being pursued. Meanwhile, the renewable energy possibilities of Mongolia
combined with SRE's exciting start has given the Company some good options
going forward.
Acknowledgements
The Company is very appreciative of the support and collaboration shown by
MRPAM and MIMR through the long struggle to secure land access and the
start-up of productions operations. The Company is also grateful to
neighbouring operator PetroChina for the cooperation and collaboration they
have shown in offering Block XX a route to commercialisation.
The Directors would like to reiterate their appreciation to the staff of Petro
Matad who have continued to work with enthusiasm, diligence, and dedication,
sometimes in highly frustrating circumstances. Shareholders' continued support
is also highly appreciated.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2024
Consolidated
31 Dec 2024 31 Dec 2023
Note $'000 $'000
Continuing operations
Revenue
Operating income 4(a) 626 -
Cost of Goods Sold 4(a) (172) -
454 -
Interest income 4(a) 193 216
Other income 4(a) 1 135
194 351
Expenditure
Consultancy fees (124) (136)
Depreciation and amortisation 4(b) (463) (190)
Employee benefits expense 4(c) (2,271) (2,076)
Exploration, exploitation and evaluation expenditure 4(d) (5,044) (2,212)
Other expenses 4(e) (3,662) (1,663)
(Loss)/Profit from continuing operations before income tax (10,916) (5,926)
Income tax expense 5 - -
(Loss)/Profit from continuing operations after income tax (10,916) (5,926)
Net (loss)/profit for the year (10,916) (5,926)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations, net of income tax of 2 26
$Nil (2023: $Nil)
Other comprehensive (loss)/income for the year, net of income tax 2 26
Total comprehensive (loss)/income for the year (10, 914) (5,900)
(Loss)/Profit attributable to owners of the parent (10,916) (5,926)
Total comprehensive (loss)/income attributable to owners of the parent (10,914) (5,900)
(Loss)/Earnings per share (cents per share)
Basic (loss)/earnings per share 6 (0.8) (0.5)
6 (0.8) (0.5)
Diluted (loss)/earnings per share
The above Consolidated Statement of Profit or Loss and Other Comprehensive
Income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
As at 31 December 2024
Consolidated
31 Dec 2024 31 Dec 2023
Note $'000 $'000
ASSETS
Current Assets
Cash and cash equivalents 7 1,987 503
Trade and other receivables 8 698 438
Prepayments 9 123 159
Financial assets 10 968 3,529
Inventory 11 223 215
Total Current Assets 3,999 4,844
Non-Current Assets
Exploration and evaluation assets 12 15,084 15,275
Investment in SunSteppe 663 946
Property, plant and equipment 13 510 239
Right-of-Use asset 13 103 99
Petroleum asset 13 503 -
Total Non-Current Assets 16,863 16,559
TOTAL ASSETS 20,862 21,403
LIABILITIES
Current Liabilities
Trade and other payables 14 961 348
Lease liability 14 109 -
Total Current Liabilities 1,070 348
Non-Current Liabilities
Decommissioning Provision 15 562 -
Total Non-Current Liabilities 562 -
TOTAL LIABILITIES 1,632 348
NET ASSETS 19,230 21,055
EQUITY
Equity attributable to owners of the parent
Issued capital 16 169,009 160,176
Reserves 17 448 243
Accumulated losses (150,227) (139,364)
TOTAL EQUITY 19,230 21,055
The above Consolidated Statement of Financial Position should be read in
conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
Consolidated
31 Dec 2024 31 Dec 2023
Note $'000 $'000
Cash flows from operating activities
Payments to suppliers and employees (9,994) (3,590)
Interest received 192 102
Net cash flows (used in)/provided by operating activities 7 (9,802) (3,488)
Cash flows from investing activities
Purchase of property, plant and equipment (344) (28)
Proceeds from sale of financial assets 2,561 (2,512)
Investment in SunSteppe 283 (946)
Proceeds from the sale of property, plant and equipment - -
Net cash flows used in investing activities 2,500 (3,486)
Cash flows from financing activities
Proceeds from issue of shares 9,390 6,523
Capital raising cost (557) (404)
Payments of lease liability principal (49) (144)
Net cash flows from financing activities 8,784 5,975
Net (decrease)/increase in cash and cash equivalents 1,482 (999)
Cash and cash equivalents at beginning of the year 503 1,476
Net foreign exchange differences 2 26
Cash and cash equivalents at the end of the year 7 1,987 503
The above Consolidated Statement of Cash Flows should be read in conjunction
with the accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Consolidated
Attributable to equity holders of the parent
Issued Accumulated Losses Other Total
Capital Reserves
Note 16
Note $'000 $'000 $'000 $'000
As at 1 January 2023 154,057 (133,440) 8 20,625
Net loss for the year - (5,926) - (5,926)
Other comprehensive income - - 26 26
Total comprehensive gain/(loss) for the year - (5,926) 26 (5,900)
Issue of share capital 16 6,523 - - 6,523
Cost of capital raising 16 (404) - - (404)
Share-based payments 16 & 17 - - 211 211
Exercise of Conditional Share Awards 16, 17 & 18 - - - -
Expiry of Options 17 & 18 - 2 (2) -
As at 31 December 2023 160,176 (139,364) 243 21,055
Net loss for the year - (10,916) - (10,916)
Other comprehensive income - - 2 2
Total comprehensive gain/(loss) for the year - (10,916) 2 (10,914)
Issue of share capital 16 9,390 - - 9,390
Cost of capital raising 16 (557) - - (557)
Transfer of Petro Matad Singapore - 53 - 53
Share-based payments 17 & 18 - - 203 203
Exercise of Conditional Share Awards 16, 17 & 18 - - - -
Expiry of Options 17 & 18 - - - -
As at 31 December 2024 169,009 (150,227) 448 19,230
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1 Corporate information
The financial report of Petro Matad Limited (Company) for the year ended 31
December 2024 was authorised for issue in accordance with a resolution of the
Directors dated 25 June 2025 which was approved on 26 June 2025.
This financial report presents the consolidated results and financial position
of Petro Matad Limited and its subsidiaries.
Petro Matad Limited (Company) incorporated in the Isle of Man on 30 August
2007 has six wholly owned subsidiaries, which are: Capcorp Mongolia LLC, Petro
Matad LLC and Petro Matad Energy LLC (incorporated in Mongolia), Central Asian
Petroleum Corporation Limited (Capcorp) and Petromatad Invest Limited (both
incorporated in the Cayman Islands), and Petro Matad Energy Limited
(incorporated in Isle of Man). Petro Matad Limited owns 50% of Sunsteppe
Renewable Energy Pte. Ltd. (formerly known as Petro Matad Singapore Pte.
Ltd.), which is incorporated in Singapore, which is owned jointly together
with Sunsteppe Energy LLC to pursue renewables energy projects. The Company
and its subsidiaries are collectively referred to as the "Group". The Group's
principal activity in the course of the financial year consisted of oil
exploration and development and investment in renewable projects in Mongolia.
Petrovis Matad Inc. (Petrovis) is a major shareholder of the Company, holding
approximately 17.61% of the shareholding at the year end of 2024.
2 Summary of material accounting policies
(a) Basis of preparation
This financial report complies with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
This financial report has been prepared on a historical cost basis, except
where otherwise stated. Historical cost is generally based on the fair values
of the consideration given in exchange for goods and services. Fair value is
the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique.
In addition, for financial reporting purposes, fair value measurements are
categorised into Level 1, 2 or 3 based on the degree to which the inputs to
the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirety, which are described as follows:
· Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at the
measurement date;
· Level 2 inputs are inputs, other than quoted prices included
within Level 1, that are observable for the asset or liability, either
directly or indirectly; and
· Level 3 inputs are unobservable inputs for the asset or
liability.
For the purpose of preparing the consolidated financial statements, the
Company is a for-profit entity.
(b) Statement of compliance
This general-purpose financial report has been prepared in accordance with the
requirements of all applicable IFRS as adopted by the European Union and
related Interpretations and other authoritative pronouncements.
(c) Going concern
The financial statements have been prepared on a going concern basis, which
contemplates the continuity of normal business activity and the realisation of
assets and the settlement of liabilities in the ordinary course of business.
The Group generated a loss of $10.92 million for year 2024 (2023 Loss: $5.93
million) and experienced net cash outflows from operating activities of $9.69
million (2023 Outflow: $3.49 million). In addition, as outlined in Note 19(b)
the Group is required to meet minimum exploration commitments on its Block XX
and Block VII Production Sharing Contract (PSC) of approximately $20.07
million. The Company previously reached an agreement with the Mineral
Resources and Petroleum Authority of Mongolia (MRPAM) that the underspent
minimum exploration commitment in Block XX can be transferred to and spent on
exploration and appraisal activities during the exploitation period, which has
commenced as the application for a 25-year Exploitation Licence (EL) for Block
XX was approved in July 2021. The Company raised an additional $9.4 million in
July 2024, which provided sufficient working capital for ongoing operations
including the drilling of an exploration well and an appraisal well in Block
XX, completion and commencement of production of the Heron-1 discovery well,
and investing in renewable energy projects through its interest in Sunsteppe
Renewable Energy Pte. Ltd.
The Company believes that the current cash balance is sufficient to continue
operations until at least July 2026. The commencement of production operations
in late 2024 has provided the Company with a revenue source which enhances the
Company's ability to remain a going concern. It is also important to note that
the Company can access loans up to $1.5 million from Petrovis under an
existing loan agreement.
Cumulative expenditures to end 2024 in Block V exceed financial commitments by
$5.1 million. The Block V PSC exploration term expired in July 2024, and the
block has been fully relinquished with no outstanding commitments remaining.
The Company is awaiting final approval of the relinquishment by the Mongolian
Government.
The Directors have prepared a cash flow forecast which indicates that the
Group will have sufficient cash to meet their working capital requirements for
the twelve-month period from the date of signing the financial report.
(d) Application of new and revised Accounting Standards
Accounting Standards that are mandatorily effective for the current reporting
year
The Group has adopted all of the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board (AASB) that are relevant
to its operations and effective for an accounting period that begins on or
after 1 January 2020.
The Directors have determined that there is no material impact of the new and
revised Standards and Interpretations on the Group and, therefore, no material
change is necessary to Group accounting policies.
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Group has not
applied the new and revised Australian Accounting Standards, Interpretations
and amendments that have been issued but are not yet effective. Based on a
preliminary review of the standards, interpretations and amendments, the
Directors do not anticipate a material change to the Group's accounting
policies, however further analysis will be performed when the relevant
standards are effective.
(e) Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company and its subsidiaries.
Control is achieved when the Company:
· has power over the investee;
· is exposed, or has rights, to variable returns from its
involvement with the investee; and
· has the ability to use its power to affect its returns.
The Company reassesses whether it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
The financial statements of the subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that
control ceases.
The financial statements of subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies.
Adjustments are made to bring into line any dissimilar accounting policies
that may exist.
A change in the ownership interest of a subsidiary that does not result in a
loss of control is accounted for as an equity transaction.
All intercompany balances and transactions, including unrealised profits
arising from intra-group transactions, have been eliminated in full.
Unrealised losses are eliminated unless costs cannot be recovered.
2 Summary of material accounting policies (continued)
(f) Foreign currency translation
Functional and presentation currency
Both the functional and presentation currency of Petro Matad Limited is United
States Dollars (USD). The Cayman Islands and Singaporean subsidiaries'
functional currency is USD. The Mongolian subsidiaries' functional currency is
Mongolian Tugrugs (MNT) which is then translated to the presentation currency,
USD.
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional
currency by applying the exchange rates ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate as at the date of the initial
transaction. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
Exchange differences are recognised in profit or loss in the period in which
they arise except for:
· Exchange differences on transactions entered into to hedge
certain foreign currency risks; and
· Exchange differences on monetary items receivable from or
payable to a foreign operation for which settlement is neither planned nor
likely to occur (therefore forming part of the net investment in the foreign
operation), which are recognised initially in other comprehensive income and
reclassified from equity to profit or loss on disposal or partial disposal on
the net investment.
Translation of subsidiaries' functional currency to presentation currency
The results of the Mongolian subsidiaries are translated into USD
(presentation currency) as at the date of each transaction. Assets and
liabilities are translated at exchange rates prevailing at the reporting date.
Exchange differences resulting from the translation are recognised in other
comprehensive income and accumulated in the foreign currency translation
reserve in equity.
On consolidation, exchange differences arising from the translation of the net
investment in Mongolian subsidiaries are recognised in other comprehensive
income and accumulated in the foreign currency translation reserve. If a
Mongolian subsidiary was sold, the proportionate share of exchange difference
would be transferred out of equity and recognised in profit and loss.
(g) Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise
cash at bank and in hand and short-term deposits with an original maturity of
three months or less.
For the purposes of the statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
(h) Trade and other receivables
Trade receivables, which generally have 30-60 day terms, are recognised
initially at fair value and subsequently measured at amortised cost using the
effective interest method, less an allowance for impairment.
Collectability of trade receivables is reviewed on an ongoing basis. An
impairment provision is recognised when there is objective evidence that the
Group will not be able to collect the receivable. Objective evidence of
impairment includes financial difficulties of the debtor, default payments or
debts more than 60 days overdue. The amount of the impairment loss is the
amount by which the receivable carrying value exceeds the present value of the
estimated future cash flows, discounted at the original effective interest
rate.
(i) Plant and equipment
Plant and equipment are stated at historical cost less accumulated
depreciation and any impairment in value.
Depreciation is calculated on a straight-line basis over the estimated useful
life of the asset and is currently estimated to be an average of 6 years.
The assets' residual values, useful lives and amortisation methods are
reviewed, and adjusted if appropriate, at each financial year end.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when
no further future economic benefits are expected from its use or disposal.
(j) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity
becomes a party to the contractual provisions to the instruments. For
financial assets, this is equivalent to the date that the Company commits
itself to either purchase or sell of the asset (i.e. trade date accounting is
adopted).
Financial instruments are initially measured at fair value plus transaction
costs, except where the instruments are classified at 'Fair value through
profit or loss' in which case transaction costs are expensed to profit or loss
immediately. Financial instruments are classified and measured as set out
below.
Classification and subsequent measurement
Financial instruments are subsequently measured at either fair value,
amortised cost using the effective interest rate method or cost. Fair value
represents the price that would be received to sell an asset or paid to
transfer a liability in orderly transaction between market participants at the
measurement date. Where available, quoted prices in an active market are used
to determine fair value. In other circumstances, valuation techniques are
adopted.
Amortised cost is calculated as (i) the amount at which the financial asset or
financial liability is measured at initial recognition; (ii) less principal
repayments; (iii) plus or minus the cumulative amortization of the difference,
if any, between the amount initially recognised and the maturity amount
calculated using the effective interest method; and (iv) less any reduction
for impairment.
The effective interest method is used to allocate interest income or interest
expense over the relevant period and is equivalent to the rate that exactly
discounts estimated future cash payments or receipts (including fees,
transaction costs and other premiums or discounts) through the expected life
(or when this cannot be reliably predicted, the contractual term) of the
financial instrument to the net carry amount of the financial asset or
financial liability. Revisions to expected future net cash flows will
necessitate an adjustment to the carrying value with a consequential
recognition of an income or expense in profit or loss. The Group does not
designate any interest in subsidiaries, associates or joint venture entities
as being subject to the requirements of accounting standards specifically
applicable to financial statements.
(i) Financial assets at fair value through profit and loss or through
other comprehensive Income
Financial assets are classified at 'Fair value through profit or loss' or
'Fair value through other comprehensive Income' when they are either held for
trading for purposes of short term profit taking, derivatives not held for
hedging purposes, or when they are designated as such to avoid an accounting
mismatch or to enable performance evaluation where a group of financial assets
is managed by key management personnel on a fair value basis in accordance
with a documented risk management or investment strategy. Such assets are
subsequently measured at fair value with changes in carrying value being
included in profit or loss if electing to choose 'fair value through profit or
loss' or other comprehensive income if electing 'fair value through other
comprehensive income'.
(ii) Financial Liabilities
The Group's financial liabilities include trade and other payables, loan and
borrowings, provisions for cash bonus and other liabilities which include
deferred cash consideration and deferred equity consideration for acquisition
of subsidiaries & associates.
(j) Financial instruments (continued)
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings, and payables, net of directly attributable
transaction costs.
Fair value
Fair value is determined based on current bid prices for all quoted
investments. Valuation techniques are applied to determine the fair value for
all unlisted securities, including recent arm's length transactions, reference
to similar instruments and option pricing models.
Derecognition
Financial assets are derecognised where the contractual rights to receipts of
cash flows expire or the asset is transferred to another party whereby the
entity no longer has any significant continuing involvement in the risk and
benefits associated with the asset. Financial liabilities are recognised where
the related obligations are either discharged, cancelled or expire. The
difference between the carrying value of the financial liability extinguished
or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed, is
recognised in profit or loss.
(k) Inventory
Inventories are stated at the lower of cost and net realisable value. Costs of
inventories are determined on a first-in-first-out basis. Net realisable value
represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
(l) Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred by the Group is expensed
separately for each area of interest. The Group's policy is to expense all
exploration and evaluation costs funded out of its own resources.
(m) Exploration and evaluation assets
Exploration and evaluation assets arising out of business combinations are
capitalised as part of deferred exploration and evaluation assets. Subsequent
to acquisition, exploration expenditure is expensed in accordance with the
Group's accounting policy.
(n) Impairment of tangible and intangible assets other than goodwill
At each reporting date, the Group assesses whether there is any indication
that tangible and intangible asset may be impaired. Where an indicator of
impairment exists, the Group makes a formal estimate of recoverable amount for
each asset or cash generating unit to determine the extent of the impairment
loss (if any). Where the carrying amount of an asset (or cash-generating unit)
exceeds its recoverable amount the asset is considered impaired and is written
down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value
in use. It is determined for an individual asset, unless the asset's value in
use cannot be estimated to be close to its fair value less costs to sell and
it does not generate cash inflows that are largely independent of those from
other assets or groups of assets, in which case, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the assets (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the
reversal of impairment loss is treated as a revaluation increase
Impairment review for deferred exploration and evaluation assets is carried
out on a project-by-project basis, where each project representing a single
cash generating unit. An impairment review is undertaken when indicators of
impairment arise, typically when one of the following circumstances apply:
· Unexpected geological occurrences that render the
resource uneconomic;
· Title to asset is compromised;
· Variations in prices that render the project
uneconomic; or
· Variations in the currency of operation.
(o) Trade and other payables
Trade and other payables are initially recognised at fair value. After initial
recognition, trade and other payables are carried at amortised cost and due to
their short-term nature are not discounted. They represent liabilities for
goods and services provided to the Group prior to the end of the financial
year that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services. The amounts
are unsecured and are usually paid within 30 days of recognition.
(p) Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, and it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation. If
the effect of the time-value of money is material, provisions are determined
by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
(q) Leases
The Group as lessee
At inception of a contract, the Group assesses if the contract contains or is
a lease. If there is a lease present, a right-of-use asset and a corresponding
lease liability are recognised by the Group where the Group is a lessee.
However, all contracts that are classified as short-term leases (i.e. a lease
with a remaining lease term of 12 months or less) and leases of low-value
assets are recognised as an operating expense on a straight-line basis over
the term of the lease.
Initially the lease liability is measured at the present value of the lease
payments still to be paid at the commencement date. The lease payments are
discounted at the interest rate implicit in the lease. If this rate cannot be
readily determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as
follows:
· fixed lease payments less any lease incentives;
· variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement date;
· the amount expected to be payable by the lessee under residual
value guarantees;
· the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options;
· lease payments under extension options, if the lessee is
reasonably certain to exercise the options; and
· payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability, any lease payments made at or before the commencement date
and any initial direct costs. The subsequent measurement of the right-of-use
assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the
underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group anticipates to exercise a purchase
option, the specific asset is depreciated over the useful life of the
underlying asset.
The Group as lessor
Upon entering into each contract as a lessor, the Group assesses if the lease
is a finance or operating lease.
A contract is classified as a finance lease when the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee.
All other leases not within this definition are classified as operating
leases.
Rental income received from operating leases is recognised on a straight-line
basis over the term of the specific lease.
Initial direct costs incurred in entering into an operating lease (for
example, legal cost, costs to set up equipment) are included in the carrying
amount of the leased asset and recognised as an expense on a straight-line
basis over the lease term.
Rental income due under finance leases are recognised as receivables at the
amount of the Group's net investment in the leases. When a contract is
determined to include lease and non-lease components, the Group applies IFRS
15 to allocate the consideration under the contract to each component.
(r) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a deduction,
net of tax, from the proceeds.
(s) Revenue
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured. The
following specific criteria must also be met before revenue is recognised:
Operating Revenue
Revenue is recognized when produced oil reaches the TA-1 central facility in
Block XIX which is designated as the sales point.
Interest revenue
Revenue is recognised on an accrual basis using the effective interest method.
(t) Share-based payment transactions
The Group provides to certain key management personnel share-based payments,
whereby they render services in exchange for rights over shares
(equity-settled transactions).
The cost of these equity-settled transactions is measured by reference to the
fair value at the date at which they are granted. The fair value is determined
by use of the Black Scholes model.
In determining the fair value of the equity-settled transactions, vesting
conditions that are not market conditions are not taken into account.
The cost of equity-settled transactions is recognised as an expense on a
straight-line basis, together with a corresponding increase in equity, over
the period in which they vest.
The cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects:
· the extent to which the vesting period has expired; and
· the number of awards that, in the opinion of the Directors of
the Group, will ultimately vest.
This opinion is formed based on the best available information at the
reporting date. The impact of the revision of original estimates, if any, is
recognised in profit or loss such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to equity reserves.
Where the terms of an equity-settled award are modified, as a minimum, an
expense is recognised as if the terms had not been modified. In addition, an
expense is recognised for any increase in the value of the transaction as a
result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award
is recognised immediately. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
(u) Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable
or recoverable in respect of the taxable profit or tax loss for the year. It
is calculated using tax rates and tax laws that have been enacted or
substantively enacted by the reporting date. Current tax for current and prior
years is recognised as a liability (or asset) to the extent that it is unpaid
(or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability
method in respect of temporary differences arising from differences between
the carrying amount of assets and liabilities and the corresponding tax base
of those items.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised to the extent that
it is probable that sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses and tax offsets can be
utilised. However, deferred tax assets and liabilities are not recognised if
the temporary differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result of a business
combination) that affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in relation to taxable
temporary differences arising from goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the year(s) when the asset and liability giving rise to
them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by reporting date. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the consolidated Group expects, at the
reporting date, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when they relate to income
taxes levied by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax is recognised as an expense or income in the profit
or loss, except when it relates to items credited or debited directly to
equity/other comprehensive income, in which case the deferred tax is also
recognised directly in equity/other comprehensive income, or where it arises
from the initial accounting for a business combination, in which case it is
taken into account in the determination of goodwill.
(v) Earnings per share
Basic earnings per share is calculated as net profit attributable to owners of
the parent, adjusted to exclude any costs of servicing equity (other than
dividends), divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to owners
of the parent, adjusted for:
· Costs of servicing equity (other than dividends);
· The after-tax effect of dividends and interest associated with
dilutive potential ordinary shares that have been recognised as expenses; and
· Other non-discretionary changes in revenues or expenses during
the year that would result from the conversion of dilutive potential ordinary
shares, divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares, adjusted for any bonus element.
(w) Significant accounting judgments, estimates and assumptions
In applying the Group's accounting policies, management continually evaluates
judgments, estimates and assumptions based on experience and other factors,
including expectations of future events that may have an impact on the Group.
All judgments, estimates and assumptions made are believed to be reasonable
based on the most current set of circumstances available to management. Actual
results may differ from the judgments, estimates and assumptions.
Any revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both the
current and future periods.
The following are the most critical estimates and judgments made by management
in applying the accounting policies and have the most significant effect on
the amounts recognised in the financial statements.
Share-based payments
The Group measures the cost of equity-settled transactions with Directors and
employees at the fair value of the equity instruments at the date at which
they are granted. The fair value is determined using a Black Scholes model.
One of the inputs into the valuation model is volatility of the underlying
share price which is estimated on the historical share price.
Recovery of the exploration and evaluation assets
The ultimate recoupment of the exploration and evaluation assets is dependent
upon successful development and commercial exploitation or alternatively the
sale of the respective areas of interest at an amount at least equal to book
value. At the point that it is determined that any capitalised exploration
and evaluation expenditure is not recoverable, it is written off.
Going Concern
The Group assesses the going concern of the Group on a regular basis,
reviewing its cash flow requirements, commitments and status of PSC
requirements and funding arrangements. Refer to Note 2(c) for further details.
3 Operating segments
Operating segments have been identified on the basis of internal reports of
the Group that are regularly reviewed by the chief operating decision maker in
order to allocate resources to the segments and to assess their performance.
The chief operating decision maker has been identified as the Board of
Directors. On a regular basis, the Board receives financial information on a
consolidated basis similar to the financial statements presented in the
financial report, to manage and allocate their resources. Based on the
information provided to the Board of Directors, the Group has one operating
segment and geographical segment, being Mongolia; as such no separate
disclosure has been provided.
31 Dec 2024 31 Dec 2023
$'000 $'000
4 Revenues and expenses
(a) Revenue
Operating income - Oil sale revenue 626 -
Cost of Goods Sold:
Transportation and services (131) -
Royalty paid to MRPAM (41) -
454 -
Interest income 193 216
Other income:
Other income 1 135
194 351
(b) Depreciation and Amortization
Depreciation of assets over useful life
Amortization of evaluation assets on unit of production basis
Depreciation - Property and Plant Equipment 72 52
Depreciation - Right-of-Use asset 154 138
Depreciation - Petroleum Asset (Decommissioning Reserve) 46 -
Capitalized - Petroleum Asset 191 -
463 190
(c) Employee benefits expense
Included in employee benefits expense are the following:
Wages and salaries 1,886 1,676
Bonuses - 11
Non-Executive Directors' fees (including 146 142
Directors of affiliates)
Consultancy fees 36 36
Share-based payments 203 211
2,271 2,076
(d) Exploration, exploitation and evaluation expenditure
Exploration, exploitation and evaluation expenditure relates to the following
PSCs:
Block XX - Exploitation 5,037 262
Block V - Exploration 7 1,950
5,044 2,212
(e) Other expenses
Included in other expenses are the following:
Administration costs 1,043 827
Sunsteppe cost 1,738 200
PSC administration costs 201 335
Production bonus 500 -
Audit fees 64 72
Travel expenses 116 229
3,662 1,663
31 Dec 2024 31 Dec 2023
Note $'000 $'000
5 Income tax
Income tax recognised in the statement of profit or loss:
Tax expense/(benefit) comprises:
Current tax expense/(benefit) - -
Deferred tax expense/(benefit) relating to the - -
origination and reversal of temporary differences
Total tax expense/(benefit) reported in the statement of profit or loss - -
The prima facie income tax benefit on pre-tax accounting loss from continuing
operations reconciles to the income tax expense/(benefit) in the
financial statements as follows:
Net (loss)/profit for the year (10,916) (5,926)
Income tax benefit calculated at 10% (i) 1,091 593
Effect of different tax rates on entities in different jurisdictions (ii) (293) (115)
Change in unrecognised deferred tax assets (798) (478)
- -
(i) The tax rate used in the above reconciliation is the
corporate tax rate of 10% payable by Mongolian corporate entities on taxable
profits up to 6 billion MNT under Mongolian tax law.
(ii) Petromatad Invest Limited and Capcorp are exempt of
Mongolian corporate tax on profits derived from the sale of oil under their
PSCs once production commences and are subject to Cayman Islands income tax at
a rate of 0%. As a consequence, no provision for Mongolian corporate tax or
Cayman Islands current tax or deferred tax has been made in the Company's
accounts in relation to them.
Petro Matad Limited and Petro Matad Energy Limited are subject to Isle of Man
income tax at a rate of 0%. As a consequence, no provision for Isle of Man
current tax or deferred tax has been made in the companies' accounts.
6 (Loss)/Earnings per share
The following reflects the loss and share data used in the total operations
basic and diluted (loss)/earnings per share computations:
31 Dec 2024 31 Dec 2023
cents per share cents per share
Basic (loss)/earnings per share (0.8) (0.5)
Diluted (loss)/earnings per share (0.8) (0.5)
$'000's $'000's
The loss and weighted average number of ordinary shares used in the
calculation of basic and diluted (loss)/earnings per share are as follows:
Net (loss)/profit attributable to owners of the parent (10,916) (5,926)
Weighted average number of ordinary shares for the purposes of diluted 1,299,390 1,090,898
(loss)/earnings per share (in thousands)
Weighted average number of ordinary shares for the purposes of basic 1,299,390 1,090,898
(loss)/earnings per share (in thousands)
31 Dec 2024 31 Dec 2023
$'000 $'000
7 Cash and cash equivalents
Cash at bank and in hand 1,987 503
1,987 503
Cash at bank and in hand earns interest at fixed and floating rates based on
prevailing bank rates, and the fair value of the above cash and cash
equivalents is $1,987,000 (2023: $503,000) due to the short-term nature of the
instruments.
Reconciliation from the net gain/(loss) after tax to the net cash flows from
operations:
Net (loss)/gain after tax (10,916) (5,926)
Adjustments for:
Depreciation and amortisation 463 190
Share based payments 203 211
Decommissioning Provision 13 -
Unrealised foreign exchange (gains)/ losses 1 (3)
Transfer of Petro Matad Singapore 53 -
Changes in assets and liabilities
Decrease/(increase) in trade and other receivables (260) 2,169
Decrease/(increase) in prepayments 36 (21)
Decrease/(increase) in inventory (8) -
Increase/(decrease) in trade and other payables 613 (108)
Net cash flows used in operating activities (9,802) (3,488)
Non-cash investing and financing activities
There were no non-cash investing or financing activities undertaken in the
2024 financial year or prior year (2023: $0.00).
8 Trade and other receivables
Current
Other debtors 698 438
698 438
All amounts are recoverable and are not considered past due or impaired.
2024 account receivables include the oil sales revenue due from PetroChina
Daqing Tamsag for the crude oil produced for the period from October to
December 2024 and stored at the TA-1 central facility in Block XIX to be sold
to the buyer.
9 Prepayments
Prepayments 123 159
123 159
10 Financial assets
Long Term Deposits 968 3,529
968 3,529
The Group holds term deposits with an average weighted interest rate of 6.73%.
The deposits have maturity dates greater than 3 months. None of these assets
had been past due or impaired at the end of the reporting period.
31 Dec 2024 31 Dec 2023
$'000 $'000
11 Inventory
Raw materials 223 215
223 215
Inventory is mainly consumables, including casing, mud and drilling materials
purchased for Block XX.
12 Exploration and evaluation assets
Exploration and evaluation assets 15,084 15,275
15,084 15,275
The exploration and evaluation asset arose following the initial acquisition
in February 2007 of 50% of Petromatad Invest Limited, together with
acquisition on 12 November 2007 of the remaining 50% not already held by the
Group, for a consideration of 23,340,000 ordinary shares credited as fully
paid up and with an estimated fair value of $0.50 per share, taking into
account assets and liabilities acquired on acquisition. This relates to the
exploration and evaluation of PSC Block XX.
The ultimate recoupment of exploration and evaluation expenditure is dependent
upon successful development and commercial exploitation or alternatively the
sale of the respective areas of interest at an amount at least equal to book
value.
Management have reviewed for impairment indicators on Block XX and no
impairment has been noted.
With the commencement of production in Block XX, the Group has commenced
amortization of the asset utilizing the unit of production basis.
13 Property, plant and equipment, Right-of-Use asset and Petroleum asset
Plant and equipment at cost 583 939
Accumulated depreciation and impairment (73) (700)
510 239
Right-of-Use asset 137 132
Accumulated depreciation - Right-of-Use asset (34) (33)
103 99
Petroleum asset 549 -
Accumulated depreciation - Petroleum asset (46) -
503 -
Reconciliation of carrying amounts at the beginning and end of the year:
Plant and equipment Right-of-Use asset Petroleum asset Total
Total Total Total
$'000 $'000 $'000 $'000
As at 1 January 2023 (net of accumulated depreciation) 261 92 - 353
Additions 28 144 - 172
Foreign exchange 2 1 - 3
Depreciation charge for the year (52) (138) - (190)
As at 31 December 2023 (net of accumulated depreciation) 239 99 - 338
Additions 344 158 549 1,051
Foreign exchange - - - -
Depreciation charge for the year (73) (154) (46) (273)
As at 31 December 2024 (net of accumulated depreciation) 510 103 503 1,116
The following useful lives are used in the calculation of depreciation:
Plant and equipment - 2 to 10 years.
31 Dec 2024 31 Dec 2023
$'000 $'000
14 Trade and other payables (current)
Trade payables 961 348
Lease liability 109 -
1,070 348
Trade payables are non-interest bearing and are normally settled within 60 day
terms.
15 Decommissioning Provision (Non-current)
Decommissioning Provision 562 -
562 -
The Group recognizes a provision for the present value of the estimated cost
to dismantle and decommission production wells and facilities. This estimated
cost is capitalized as part of the petroleum asset and depreciated over its
useful life. The provision is reviewed annually and adjusted to reflect
changes in cost estimates, scope, or applicable discount rates.
16 Issued capital
Ordinary Shares
1,483,883,601 shares issued and fully paid 169,009 160,176
(2023: 1,113,883,601)
169,009 160,176
Movements in ordinary shares on issue:
Number of Shares Issue $'000
Price $
As at 1 January 2023 898,761,649 154,057
Placement shares through Shore Capital on 10 Feb 2023 (note (a)) 94,787,994 $0.030 2,866
Placement shares through Zeus on 10 February 2023 (note (b)) 67,000,626 $0.030 2,027
Direct subscription shares on 10 February 2023 (note (c)) 33,333,332 $0.031 1,025
Open Offer shares on 10 February 2023 (note (d)) 20,000,000 $0.030 605
Capital raising cost (404)
As at 31 December 2023 1,113,883,601 160,176
Placement shares through Shore Capital on 1 July 2024 (note (e)) 189,311,666 $0.025 4,802
Placement shares through Zeus on 1 July 2024 (note (f)) 117,381,250 $0.025 2,981
Direct subscription shares on 1 July 2024 (note (g)) 43,307,084 $0.025 1,100
Open Offer shares on 1 July 2024 (note (h)) 20,000,000 $0.025 507
Capital raising cost (557)
As at 31 December 2024 1,483,883,601 169,009
(a) On 10 February 2023, the Company concluded a placing by issuing
94,787,994 shares at a price of GBP0.025 per share arranged through its
nominated adviser, broker and joint book runner for the purposes of the
Placing, Shore Capital Stockbrokers.
(b) On 10 February 2023, the Company concluded a placing by issuing
67,000,626 shares at a price of GBP0.025 per share arranged through its broker
and joint book runner for the purposes of the Placing, Zeus Capital.
(c) On 10 February 2023, the Company issued 33,333,332 shares through
direct subscriptions at a price of GBP0.025 per share.
(d) On 10 February 2023, the Company issued 20,000,000 shares to
shareholders at a price of GBP0.025 per share through a retail offering on the
Bookbuild platform.
(e) On 1 July 2024, the Company concluded a placing by issuing 189,311,666
shares at a price of GBP0.020 per share arranged through its nominated
adviser, broker and joint book runner for the purposes of the Placing, Shore
Capital Stockbrokers
(f) On 1 July 2024, the Company concluded a placing by issuing
117,381,250 shares at a price of GBP0.020 per share arranged through its
broker and joint book runner for the purposes of the Placing, Zeus Capital.
(g) On 1 July 2024, the Company issued 43,307,084 shares through direct
subscriptions at a price of GBP0.020 per share.
(h) On 1 July 2024, the Company issued 20,000,000 shares to shareholders
at a price of GBP0.020 per share through a retail offering.
17 Reserves
A detailed breakdown of the reserves of the Group is as follows:
Equity benefits reserve Foreign currency translation Total
Merger reserve
$'000 $'000 $'000 $'000
As at 1 January 2023 831 545 (1,368) 8
Currency translation differences - - 26 26
Expiry of Options - (2) - (2)
Exercise of Awards - - - -
Share based payments - 211 - 211
As at 31 December 2023 831 754 (1,342) 243
Currency translation differences - - 2 2
Expiry of Options - - - -
Exercise of Awards - - - -
Share based payments - 203 - 203
As at 31 December 2024 831 957 (1,340) 448
Nature and purpose of reserves
Merger reserve
The merger reserve arose from the Company's acquisition of Capcorp on 12
November 2007. This transaction is outside the scope of IFRS 3 'Business
Combinations' and as such Directors have elected to use UK Accounting
Standards FRS 6 'Acquisitions and Mergers'. The difference, if any, between
the nominal value of the shares issued plus the fair value of any other
consideration, and the nominal value of the shares received in exchange are
recorded as a movement on other reserves in the consolidated financial
statements.
Equity benefits reserve
The equity benefits reserve is used to record the value of Options and
Conditional Share Awards provided to employees and Directors as part of their
remuneration, pursuant to the Group's Long-Term Equity Incentive Plan (Plan or
Group's Plan). Refer to Note 18 for further details of these plans.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange
differences arising from the translation of the financial statements of
foreign subsidiaries.
18 Share based payments
(a) Long Term Equity Incentive Plan (Plan or Group's Plan)
The Group provides long term incentives to employees (including Executive
Directors), Non-Executive Directors and consultants through the Group's Plan
based on the achievement of certain performance criteria. The Plan provides
for share awards in the form of Options and Conditional Share Awards. The
incentives are awarded at the discretion of the Board, or in the case of
Executive Directors, the Remuneration Committee of the Board, who determine
the level of award and appropriate vesting, service and performance conditions
taking into account market practice and the need to recruit and retain the
best people.
Options may be exercised, subject only to continuing service, during such
period as the Board may determine. Options have a term of 10 years.
Conditional Share Awards shall vest subject to continuing service and
appropriate and challenging service and performance conditions determined by
the Remuneration Committee relating to the overall performance of the Group.
Conditional Share Awards based on performance conditions will vest on
achievement of the following performance conditions:
· 25% vest on the first discovery of oil on a
commercial scale, determined by management as being 5 July 2021 upon the award
of the Exploitation License;
· 25% vest on the first production of oil on a
commercial scale, estimated by management as to be achieved prior to 30 June
2025; and
· 50% vest on the Company achieving the sale of
1 million barrels of oil, estimated by management as being by 31 December
2026.
Other Conditional Share Awards have service conditions tied to employment
continuity and are available for vesting in three equal annual instalments on
various dates.
(b) Option pricing model
The fair value of Options granted is estimated as at the date of grant using
the Black Scholes model, taking into account the terms and conditions upon
which the Options were granted.
Following table summarizes Options granted during 2023, along with relevant
details in relation to the grant.
29 May 2023
Options Granted 12,147,000
Share price at grant date $0.0593
Expected Volatility (%) 55
Risk-free interest rates (%) 4.5%
Exercise Price (in GBP) 0.0480
Estimate fair value of option $0.0407
Options granted above are exercisable as follows:
· 33% one year after grant date
· 33% two years after grant date
· 34% three years after grant date
No Options have been issued during 2024.
(c) Movement in Share Options
The weighted average fair value for all Options in existence as at 31 December
2024 is 0.04 (2023: 0.04).
Granted during the year Lapsed during the year Closing balance as at 31 December 2023
Opening balance at 1 January 2023
Exercisable as at 31 December 2023
Exercised during the year
Grant of options on 9 July 2013 50,000 - (50,000) - - -
Grant of options on 29 May 2023 - 12,147,000 (759,000) - 11,388,000 -
50,000 12,147,000 (809,000) - 11,388,000 -
Weighted Average Exercise Price (cents per option) 6.33 5.93 5.56 - 5.93 -
Granted during the year Lapsed during the year Closing balance as at 31 December 2024
Opening balance at 1 January 2024
Exercisable as at 31 December 2024
Exercised during the year
Grant of options on 29 May 2023 11,388,000 - - - 11,388,000 -
11,388,000 - - - 11,388,000 -
Weighted Average Exercise Price (cents per option) 5.93 - - - 5.93 -
(d) Share Options Contractual Life
The weighted average remaining contractual life of outstanding share Options
is 8.4 year (2023: 9.4 years).
(e) Conditional Share Awards pricing model
The fair value of Conditional Share Awards granted is estimated as at the date
of grant using the Black Scholes model, taking into account the terms and
conditions upon which the Awards were granted.
No awards were granted in 2023 and 2024.
(f) Movement in Conditional Share Awards
The weighted average fair value for all Awards in existence
as at 31 December 2024 is 0.84 (2023: 0.84).
Consolidated Granted during the year Exercised during the year Lapsed during the year Closing balance Exercisable as at 31 December 2023
Opening balance at 1 January 2023 as at 31 December 2023
Grant of Conditional Share Awards on 3 Jun 2008 123,750 - - - 123,750 -
Grant of Conditional Share Awards on 8 Apr 2009 60,000 - - - 60,000 -
Grant of Conditional Share Awards on 9 Jul 2010 214,500 - - - 214,500 -
Grant of Conditional Share Awards on 6 Apr 2011 18,000 - - - 18,000 -
Grant of Conditional Share Awards on 5 Jul 2011 135,000 - - - 135,000 -
Grant of Conditional Share Awards on 22 Nov 2011 37,500 - - - 37,500 -
Grant of Conditional Share Awards on 5 Dec 2011 21,450 - - - 21,450 -
Grant of Conditional Share Awards on 25 Apr 2012 75,000 - - - 75,000 -
Grant of Conditional Share Awards on 4 Dec 2012 2,250 - - - 2,250 -
Grant of Conditional Share Awards on 9 Jul 2013 90,000 - - - 90,000 -
777,450 - - - 777,450 -
Weighted Average Exercise Price (cents per award) 1.00 - - - 1.00 -
Consolidated Granted during the year Exercised during the year Lapsed during the year Closing balance Exercisable as at 31 December 2024
Opening balance at 1 January 2024 as at 31 December 2024
Grant of Conditional Share Awards on 3 Jun 2008 123,750 - - - 123,750 -
Grant of Conditional Share Awards on 8 Apr 2009 60,000 - - - 60,000 -
Grant of Conditional Share Awards on 9 Jul 2010 214,500 - - - 214,500 -
Grant of Conditional Share Awards on 6 Apr 2011 18,000 - - - 18,000 -
Grant of Conditional Share Awards on 5 Jul 2011 135,000 - - - 135,000 -
Grant of Conditional Share Awards on 22 Nov 2011 37,500 - - - 37,500 -
Grant of Conditional Share Awards on 5 Dec 2011 21,450 - - - 21,450 -
Grant of Conditional Share Awards on 25 Apr 2012 75,000 - - - 75,000 -
Grant of Conditional Share Awards on 4 Dec 2012 2,250 - - - 2,250 -
Grant of Conditional Share Awards on 9 Jul 2013 90,000 - - - 90,000 -
777,450 - - - 777,450 -
Weighted Average Exercise Price (cents per award) 1.00 - - - 1.00 -
(g) Conditional Share Awards Contractual Life
The weighted average remaining contractual life of outstanding Conditional
Share Awards is 3.5 years (2023: 4.5 years).
(h) Summary of Share Based Payments
A reconciliation of all share-based payments made during the year is as
follows:
31 Dec 2024 31 Dec 2023
Note $'000 $'000
Vesting of Options and Awards 17 203 211
203 211
31 Dec 2024 31 Dec 2023
Note $'000 $'000
Lapsed Options 17 - (2)
- (2)
19 Commitments and contingencies
(a) Operating lease commitments
Operating leases relate to premises used by the Group in its operations,
generally with terms between 2 and 5 years. Some of the operating leases
contain options to extend for further periods and an adjustment to bring the
lease payments into line with market rates prevailing at that time. The leases
do not contain an option to purchase the leased property.
31 Dec 2024 31 Dec 2023
$'000 $'000
Operating Leases:
Within one year 66 -
After one year but not more than five years - -
Greater than five years - -
66 -
(b) Exploration expenditure commitments
Petromatad Invest Limited and Capcorp have minimum spending obligations, under
the terms of their PSCs on Blocks XX and V with MRPAM.
On 16 January 2025, the Company signed a PSC for petroleum exploration Borzon
Block VII with the Government of Mongolia. The Table below includes PSC fees
and minimum exploration work obligations of Borzon VII block for the
eight-year term of the PSC.
The amounts set out below do not include general and administrative expenses.
31 Dec 2024 31 Dec 2023
$'000 $'000
Production Sharing Contract Fees:
Within one year 360 200
After one year but not more than five years 1,602 434
Greater than five years 1,856 1,433
3,818 2,067
Minimum Exploration Work Obligations:
Within one year 5,404 -
Greater than one year but no more than five years 11,869 -
Greater than five years 2,801 6,449
20,074 6,449
(c) Contingencies
On 5 August 2016, Shell through its Affiliate company announced it would be
withdrawing from Blocks IV and V in West/Central Mongolia. As part of the
negotiations leading to formal Mongolian Government approval of the
reassignment of interest from Shell's Affiliate to the Company's Affiliate,
Shell agreed to a payment of $5 million to be remitted to the Company's
Affiliate upon such government approval being received. A condition to the
payment by Shell is that the proceeds are required to be repaid to Shell by
the Company in the event a farmout is concluded in future prior to the
development of either Block IV or V. Block IV has since been relinquished by
the Company in its entirety and Block V is in process of formal processes for
final relinquishment. As a result, the conditional payment is no longer
applicable. The $5 million payment from Shell was received on 1 February 2017.
20 Related party disclosures
The immediate parent and ultimate controlling party of the Group is Petro
Matad Limited.
The consolidated financial statements include the financial statements of
Petro Matad Limited and the subsidiaries listed in the following table:
Equity Interest
Country of 2024 2023
Incorporation % %
Central Asian Petroleum Corporation Limited Cayman Islands 100 100
Capcorp Mongolia LLC Mongolia 100 100
Petromatad Invest Limited Cayman Islands 100 100
Petro Matad LLC Mongolia 100 100
Sunsteppe Renewable Energy Pte. Ltd. (formerly Petro Matad Singapore Pte. Singapore 50 100
Ltd.)
Petro Matad Energy Limited Isle of Man 100 100
Sunsteppe Power LLC Mongolia 50 50
Subsidiary Details
Central Asian Petroleum Corporation Limited (Capcorp) was acquired on 12
November 2007. Petro Matad Limited holds 43,340,000 ordinary shares of $0.01
each.
Capcorp Mongolia LLC is 100% owned by Capcorp. Capcorp holds 1,000,000
ordinary shares of MNT150 each.
Petromatad Invest Limited was acquired on 12 November 2007. 25,000 shares of
$1 each held by Capcorp was transferred to Petro Matad Limited on 25 November
2019 resulting in Petro Matad Limited holding 50,000 shares of $1 each.
Petro Matad LLC is 100% owned by Petromatad Invest Limited. Petromatad Invest
Limited holds 15,000 ordinary shares of MNT10,000 each.
Petro Matad Singapore Pte. Ltd was 100% owned by Petro Matad Limited which
held 50,000 ordinary shares of SG$1.On 20 February 2024, the Company
transferred 50% of Petro Matad Singapore Pte. Ltd to Sunsteppe Energy LLC and
is currently holding 25,000 ordinary shares of SG$1. Petro Matad Singapore
Pte. Ltd has also been renamed as Sunsteppe Renewable Energy Pte. Ltd.
Sunsteppe Power LLC which was previously owned 50% by Petro Matad LLC has been
transferred to Sunsteppe Renewable Energy Pte. Ltd as a wholly owned
subsidiary.
Petro Matad Energy Limited is 100% owned by Petro Matad Limited. Petro Matad
Limited holds 50,000 Ordinary shares of $1 each.
Balances and transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on consolidation and are
not disclosed in this note.
Petrovis Matad Inc. (Petrovis) is a major shareholder of the Company, holding
approximately 17.61% of the shareholding at year end of 2024.
21 Key management personnel
(a) Details of Directors
The names of the Company's Directors, having authority and responsibility for
planning, directing and controlling the activities of the Group, in office
during 2023 and 2024, are as below:
The Directors were in office until the date of this report and for this entire
period unless otherwise stated.
Directors
Enkhmaa Davaanyam
Non-Executive Chairperson
Timothy Paul Bushell
Non-Executive Director
Michael James Buck
Chief Executive Officer
Shinezaya Batbold
Non-Executive Director
(b) Compensation of Directors
Consolidated
31 Dec 2024 31 Dec 2023
$'000 $'000
Short-term employee benefits 711 672
Share based payment expense 4 15
715 687
(c) Other key management personnel transactions
There were no other key management personnel transactions during the year
(2023: Nil).
22 Financial risk management objectives and policies
The Group's principal financial instruments comprise cash and short-term
deposits classified as loans and receivables financial assets.
The main purpose of these financial instruments is to raise capital for the
Group's operations.
The Group also has various other financial instruments such as trade debtors
and trade creditors, which arise directly from its operations. It is, and has
been throughout the year under review, the Group's policy that no trading in
financial instruments shall be undertaken.
The main risks arising from the Group's financial instruments are interest
rate risk, foreign currency risk, credit risk and liquidity risk.
The Board is responsible for identification and control of financial risks.
The Board reviews and agrees policies for managing each of these risks as
summarised below.
Risk Exposures and Responses
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or
cash flow associated with the instrument will fluctuate due to changes in
market interest rate. Interest rate risk arises from fluctuations in interest
bearing financial assets and liabilities that the Group uses. Interest bearing
assets comprise cash and cash equivalents which are considered to be
short-term liquid assets. It is the Group's policy to settle trade payables
within the credit terms allowed and the Group does therefore not incur
interest on overdue balances.
The following table sets out the carrying amount of the financial instruments
that are exposed to interest rate risk:
31 Dec 2024 31 Dec 2023
Weighted Average Int. rate $'000 $'000
Financial Assets
Cash and cash equivalents 0.00% 1,987 503
*Other financial assets 5.60% 968 3,529
2,955 4,032
Trade and other receivables 0% 698 438
3,653 4,470
Financial Liabilities
Trade and other payables 0% 961 348
Lease liability 109 -
1,070 348
Net exposure 2,583 4,122
*Other financial assets are comprised of cash deposits placed in the banks for
terms exceeding 90 days.
Sensitivity Analysis
If the interest rate on cash balances at 31 December 2023 and 2024
weakened/strengthened by 1%, there would be no material impact on profit or
loss. There would be no effect on the equity reserves other than those
directly related to other comprehensive income movements.
Foreign currency risk
As a result of operations overseas, the Group's statement of financial
position can be affected by movements in various exchange rates.
The functional currency of Petro Matad Limited and presentational currency of
the Group is deemed to be USD because the future revenue from the sale of oil
will be denominated in USD and the costs of the Group are likewise
predominately in USD. Some transactions are however dominated in currencies
other than USD. These transactions comprise operating costs and capital
expenditure in the local currencies of the countries where the Group operates.
These currencies have a close relationship to the USD and management believes
that changes in the exchange rates will not have a significant effect on the
Group's financial statements.
The Group does not use forward currency contracts to eliminate the currency
exposures on any individual transactions.
The following significant exchange rates applied during the year:
Average rate Spot rate at the balance date
USD 2024 2023 2024 2023
Mongolian Tugrug (MNT) 1 3,390.02 3,465.85 3,420.25 3,410.69
Australian Dollar (AUD) 1 1.515831 1.506204 1.535120 1.468020
Great British Pound (GBP) 1 0.782606 0.804479 0.785108 0.785462
Sensitivity Analysis
A 5% strengthening/weakening of the MNT against USD at 31 December 2023 and
2024 would not have a material effect on profit and loss or on equity.
Price risk
The Group's exposure to price risk is minimal as the Group is currently not
revenue producing other than from interest income.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group is exposed to credit risk on its cash and cash
equivalents and other receivables as set out in Notes 7 and 8 which also
represent the maximum exposure to credit risk. The Group only deposits surplus
cash with well-established financial institutions of high quality credit
standing.
In addition, receivable balances are monitored on an ongoing basis with the
result that the Group's exposure to bad debts is not significant.
There are no significant concentrations of credit risk within the Group.
Maximum exposure to credit risk at reporting date:
31 Dec 2024 31 Dec 2023
Note $'000 $'000
Financial Assets
Trade and other receivables 8 698 438
Net exposure 698 438
Impairment Losses:
None of the Group's receivables are past due at 31 December 2024 (2023: Nil)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due.
The Group's approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group's reputation.
The Group's objective is to ensure that sufficient funds are available to
allow it to continue its exploration and development activities.
The following table details the Group's expected maturity for its
non-derivative financial assets. The table has been drawn up based on the
undiscounted maturities of the financial assets including interest that will
be earned on those assets.
Weighted average interest rate 6-12 months 1-5 over 5 years Total
6 months or less years
$'000 $'000 $'000 $'000 $'000
Cash and cash equivalents 0.00% 1,987 - - - 1,987
Trade and other receivables - 698 - - - 698
Financial Assets 6.73% 968 - - - 968
As at 31 December 2024 3,653 - - - 3,653
Cash and cash equivalents 0.00% 503 - - - 503
Trade and other receivables - 438 - - - 438
Financial Assets 6.74% 3,529 - - - 3,529
As at 31 December 2023 4,470 - - - 4,470
The remaining contractual maturities of the Group's and parent entity's
financial liabilities are:
31 Dec 2024 31 Dec 2023
$'000 $'000
6 months or less 1,070 348
6-12 months - -
1-5 years - -
over 5 years - -
1,070 348
All of the Group's amounts payable and receivable are current.
Further, the Group has exploration expenditure commitments on its PSCs as
disclosed in Note 19(b).
Fair Value of Financial Assets and Liabilities
The fair value of cash and cash equivalents and non-interest bearing financial
assets and financial liabilities of the Group approximate their carrying value
due to their short term duration.
Fair Value Hierarchy as at 31 December 2024
Level 1 Level 2 Level 3 Total
Financial Assets
Trade and other receivables - 698 - 698
Total - 698 - 698
Financial Liabilities
Trade and other payables - 961 - 961
Lease liability - 109 - 109
Total - 1,070 - 1,070
Fair Value Hierarchy as at 31 December 2023
Level 1 Level 2 Level 3 Total
Financial Assets
Trade and other receivables - 438 - 438
Total - 438 - 438
Financial Liabilities
Trade and other payables - 348 - 348
Total - 348 - 348
The fair values of the financial assets and financial liabilities included in
the level 2 category above have been determined in accordance with generally
accepted pricing models based on a discounted cash flow analysis, with the
most significant inputs being the discount rate that reflects the credit risk
of counterparties.
23 Capital management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The management of the Group
and the Group's capital is regularly reviewed by the Board. The capital
structure of the Group consists of cash and bank balances (Note 7) and equity
of the Group (comprising issued capital, reserves and retained earnings as
detailed in Notes 16 and 17). This is reviewed by the Board of Directors as
part of their regular Board meetings.
The Group monitors its capital requirements based on the funding required for
its exploration and development activities in Mongolia and operations of the
Company.
The Group is not subject to externally imposed capital requirements.
24 Events after the reporting date
Block XX Special Purpose Area status obtained in February 2025.
On 16 January 2025, the Company signed a PSC for a new petroleum exploration
Borzon Block VII block with the Government of Mongolia.
On 14 April 2025, Petro Matad Energy LLC was incorporated in Mongolia as a
wholly owned subsidiary of Petro Matad Energy Limited as the local operator
company of Borzon Block VII.
On 28 April 2025, Petro Matad LLC and PetroChina Daqing Tamsag, the operator
of neighbouring Block XIX, signed the Oil Sales Agreement covering storage,
processing, transport and export of Block XX crude oil production.
25 Auditors' remuneration
The auditor of Petro Matad Limited is Hall Chadwick (WA) Pty Ltd.
31 Dec 2024 31 Dec 2023
$'000 $'000
Amounts received or due and receivable by Hall Chadwick (WA) Pty Ltd:
- an audit or review of the financial report of the entity and any other 41 41
entity in the Group
- other services in relation to the entity and any other entity in the Group - -
41 41
Amounts received or due and receivable by Deloitte Onch Audit LLC for:
- an audit or review of the financial report of subsidiary entities 23 23
- other services in relation to the subsidiary entities - -
23 23
Amounts received or due and receivable by Deloitte Infinity Assurance LLP for:
- an audit or review of the financial report of subsidiary entities - 8
- other services in relation to the subsidiary entities - -
- 8
64 72
26 Other Information
Registered Office:
Victory House
Douglas
Isle of Man
IM1 1EQ
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. END FR UVUARVWUNUURRecent news on Petro Matad
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