REG - Petro Matad Ltd - H1 Production Operations and Well Testing Update

Petro MatadAnnouncement

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RNS Number : 1081B  Petro Matad Limited  29 September 2025

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY PETRO MATAD
LIMITED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF
THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF UNITED
KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018
("UK MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY
INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.

Petro Matad Limited

('Petro Matad' or the 'Company' or the 'Group')

Update on production operations and 2025 well testing programme

LONDON, 29 September 2025: Petro Matad Limited, the AIM quoted Mongolian oil
company, is pleased to provide the following update on its Heron-1 production
operations and the 2025 well testing programme.

Heron-1 production operations

The Heron-1 well continues to produce with artificial lift at a rate of c. 150
barrels per day (bopd) with water cut stable at c. 3%. The well performance to
date when compared to data the Company has for other wells in the basin
indicates a pressure profile similar to some of the better producing wells in
Block XIX. To date, data from Heron-1 does not show that any faults or
reservoir boundaries have been encountered that limit reservoir volume.
Trucking, offloading and transfer operations at the Block XIX TA-1 facilities
continue to run smoothly.

Following interaction with the Customs authorities, they have determined that
supporting export paperwork specific to Block XX crude is not required as the
crude is mixed with Block XIX crude and exported to the buyer as a single
product. This decision by Customs streamlines the bureaucracy considerably as
it avoids the need to provide a certificate of origin and to do laboratory
tests at the provincial testing facilities for each export shipment.

Oil sales payments

In late September, the Company received payment for July's production.
PetroChina continued to withhold 30% so the amount received was $110k net to
Petro Matad. The realised oil price for July was $66.4 per barrel. The invoice
for August production is already overdue for payment but since PetroChina has
advised that the teething problems of its new payment system have been
overcome, we are hopeful of smoother payment processing from this point
forward. It remains to be seen if PetroChina can meet the payment timetable
that it incorporated in the oil sales agreement. We are encouraging them to do
so.

Petro Matad met with senior representatives of PetroChina Mongolia to discuss
the withholding of revenue. The feedback received from the Mongolian Tax
Authorities was presented and Petro Matad provided further comfort that VAT
and Customs Duties are not payable on Block XX oil sales as per the Production
Sharing Contract, Petroleum Law and the well defined precedents set in the
country. PetroChina has responded to say that once the oil sales agreement has
been re-worded to incorporate the pertinent details, they will then start
paying the invoices in full and will clear the withheld backlog. We are
working on the amended wording as a matter of urgency.

2025 work programme

With the final permit having been approved by the provincial governor, the
construction contractor has mobilised to install the transmission line
extension that will connect Heron-1 to the national electricity grid. This
involves the construction of 1.2km of overhead 10kV transmission line and a
substation at Heron-1 to connect to the existing electrical distribution
system. The work is expected to be completed by mid-October. A 15% saving in
operating expenditure is targeted from this work.

Further to the recent update provided on Heron-2, the beam pump provided by
PetroChina is being refurbished and it and related equipment are being
prepared for installation.

The workover rig has moved to the Gazelle-1 location and is rigging up and
once completed, the production casing will be perforated across the oil
bearing zone and a well test string run in hole. Well test operations are
expected to commence in early October and complete within the month.
Preparations are in hand for the installation of production facilities in the
event of a successful test result.

Mike Buck, CEO of Petro Matad, said:

"It is a very busy period for the Company at the moment. The focus in head
office is on removing PetroChina's withholding of revenue. We are encouraged
by the recent progress on this and we are pushing to resolve the issue and to
get paid in full. Meanwhile the team in the field continues to execute the
2025 work programme at multiple sites. I look forward to updating shareholders
further as these matters progress."

 

- Ends -

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

 

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.

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