REG - Petro Matad Ltd - Interim results for six months ended 30 June 2024
19/09/2024 07:15
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RNS Number : 7653E Petro Matad Limited 19 September 2024
Petro Matad Limited
('Petro Matad' or the 'Company' or the 'Group')
Interim results for the six months ended 30 June 2024
LONDON, 19 September 2024: Petro Matad Limited, the AIM quoted Mongolian oil
company, announces its unaudited interim results for the six months ended 30
June 2024.
Financial Summary 1H 2024
The Group posted a loss of USD 2.56 USD million for the 6-month period ended
30 June 2024, which compares to a loss of USD 1.90 million for the comparable
period in 2023. The Company's cash balance at 30 June 2024 was USD 1.93
million (USD 0.77 million in cash and USD 1.16 million in Financial Assets),
which compares to a cash balance of USD 8.39 million (USD 0.82 million in cash
and USD 7.57 million in Financial Assets) on 30 June 2023.
As previously announced, a successful fundraise totalling USD 9.4 million of
gross proceeds was completed in July 2024 to fund commencement of production
and development of the Heron oil discovery in Block XX and to continue to
develop renewable energy projects through the SunSteppe Renewable Energy (SRE)
joint venture.
Operational Summary 1H 2024 and look ahead
On the Company's Block XX in eastern Mongolia where the Heron oil discovery
had been ready for the first phase of development for some time, the land
access issue continued to delay activities through the first half of 2024. The
hold up was due to delay in the government completing the registration of
Block XX as State Special Purpose Land even though this had been approved by
the cabinet in July 2023. With the matter delayed at provincial level, Petro
Matad was able to secure land use agreement at the district level in late May
2024 that allowed operational activity to go ahead in the second half of the
year.
Following the reporting period, the Company has announced the downhole
completion of the Heron-1 discovery well, the commencement of drilling of the
Heron-2 development well and the plans to spud the Gobi Bear-1 exploration
well. Operational activities are focussed on starting production from the
discovery and securing a route to market for the oil.
On the Block V Production Sharing Contract (PSC) in central Mongolia, with the
expiration of the exploration period due in late July 2024, the Company
undertook all the necessary work to hand back the acreage to the government in
good order. This work was completed ahead of the expiration of the period on
28 July 2024.
MRPAM's Exploration Tender Round offering new PSC areas continued through the
first half of the year although progress was held up by the late June 2024
parliamentary elections. As previously reported, the Company has been selected
as the preferred contractor for the two blocks for which it submitted
applications. Following the parliamentary elections the Company has been
advised that the process to award the new PSCs is now progressing.
The Company's renewable energy initiative continued to make good progress in
the first half of 2024. The SunSteppe Renewable Energy (SRE) joint venture had
high graded two projects for development. The first project involves the
provision of Green Hydrogen to Mongolia's major Oyu Tolgoi copper and gold
mine in which Rio Tinto is the major investor. An exclusive Memorandum of
Understanding was signed with Oyu Tolgoi and the Japanese Overseas
Environmental Cooperation Centre (OECC) to develop the project and supply
Green Hydrogen to be used to provide heat to facilities at the mine. Through
the involvement in the venture of OECC, the partnership was able to secure
some Japanese Government grant funding and an application for further grant
funding is expected to be made in due course.
SRE's second high graded project is the Choir 50MW Battery Energy Storage
System (BESS). The government has identified the need for a substantial BESS
at Choir to help stabilise the grid and reduce high-cost import of power from
China and Russia at peak hours and the economically wasteful export of power
during off peak periods. SRE secured approval of the feasibility study from
the Ministry of Energy for a 50MW BESS project at Choir and began preparation
of the application for the licence to construct which continued beyond the end
of the reporting period.
In parallel with bringing its two high graded projects to construction
readiness expeditiously, SRE is reviewing a number of other renewable energy
opportunities in Mongolia in order to add the most attractive to its high
graded portfolio.
Mike Buck, CEO of Petro Matad, said:
"The progress made on the land issue in 1H 2024 has been a long time coming
but with permits now in hand, our successful fund raise in July has allowed
operational activity to commence in earnest with downhole completion of
Heron-1, spud of Heron-2, plans to spud Gobi Bear-1 and preparations for
production start up.
I would like to thank the entire Petro Matad team for their relentless work,
in often frustrating conditions, so far this year and we look forward to
updating shareholders on the progress and conclusion of several workstreams in
the months to come."
- 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
Rachel Goldstein
Zeus (Joint Broker)
Simon Johnson +44 (0) 20 3829 5000
Louisa Waddell
FTI Consulting (Communications Advisory Firm)
Ben Brewerton +44 (0) 20 3727 1000
Christopher Laing
Catrin Trudgill
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 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.
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.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 30 JUNE 2024
Consolidated
30 Jun 2024 30 Jun 2023
$'000 $'000
Continuing Operations
Revenue
Consulting service revenue - 100
Interest Income 102 11
Other Income - 30
102 141
Expenditure
Consultancy fees (65) (62)
Depreciation and amortisation (105) (89)
Employee benefits expenses (869) (892)
Exploration expenditure (1) (52)
Other expenses (1,626) (948)
Profit/(Loss) from continuing operations before income tax (2,564) (1,902)
Income tax expense - -
Profit/(Loss) from continuing operations after income tax (2,564) (1,902)
Net Loss (2,564) (1,902)
Other comprehensive income/(loss)
Exchange rate differences on translating foreign operations 13 5
Other comprehensive income/(loss), net of income tax 13 5
Total comprehensive loss (2,551) (1,897)
Profit/(Loss) attributable to owners of the parent (2,564) (1,902)
Total comprehensive income/(loss) attributable to owners of the parent (2,551) (1,897)
Earnings/(loss) per share (cents per share)
- Basic and diluted earnings/(loss) per share (0.23) (0.18)
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
Consolidated
30 Jun 2024 31 Dec 2023 30 Jun 2023
$'000 $'000 $'000
ASSETS
Current Assets
Cash and cash equivalents 772 503 815
Trade and other receivables 344 438 346
Prepayments 143 159 215
Financial assets 1,160 3,529 7,572
Inventory 217 215 218
Total Current Assets 2,636 4,844 9,166
Non-Current Assets
Exploration and evaluation 15,275 15,275 15,275
Investment in SunSteppe Power LLC 793 946 468
Property, plant and equipment 222 239 266
Right-of-Use asset 43 99 38
Total Non-Current assets 16,333 16,559 16,047
TOTAL ASSETS 18,969 21,403 25,213
LIABILITIES
Current liabilities
Trade and other payables 263 348 317
Lease liability - - -
Total Current Liabilities 263 348 317
TOTAL LIABILITIES 263 348 317
NET ASSETS 18,706 21,055 24,896
EQUITY
Issued capital 160,176 160,176 160,177
Reserves 405 243 61
Accumulated losses (141,875) (139,364) (135,342)
TOTAL EQUITY 18,706 21,055 24,896
CONDENSED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 JUNE 2024
Consolidated
30 Jun 2024 30 Jun 2023
$'000 $'000
Cash flows from operating activities
Payments to suppliers and employees (2,339) 166
Consulting service revenue - 100
Interest received 102 11
Net cash flows from/(used in) operating activities (2,237) 277
Cash flows from investing activities
Purchase of property, plant and equipment (10) (26)
Proceeds from sale of financial assets 2,369 (6,555)
Investment in SunSteppe Power LLC 153 (468)
Net cash flows from/(used in) investing activities 2,512 (7,049)
Cash flows from financing activities
Proceeds from issue of shares - 6,523
Capital raising costs - (403)
Payments of lease liability principal (19) (13)
Net cash flows from/(used in) financing activities (19) 6,107
Net increase/(decrease) in cash and cash equivalents 256 (665)
Net foreign exchange differences 13 4
Cash and cash equivalents at beginning of period 503 1,476
Cash and cash equivalents at end of period 772 815
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 JUNE 2024
Consolidated
Attributable to equity holders of the parent
Issued Capital Accumulated Losses Other
$'000 $'000 Reserves $'000 Total
$'000
As at 1 January 2023 154,057 (133,440) 8 20,625
Income/(Loss) for the period - (1,902) - (1,902)
Other comprehensive income - - 5 5
Total comprehensive income/(loss) for the period 154,057 (135,342) 13 18,728
Transactions with owners in their capacity as owners
Issue of share capital 6,523 - - 6,523
Cost of capital raising (403) - - (403)
Share based payments - - 48 48
As at 30 June 2023 160,177 (135,342) 61 24,896
As at 1 January 2024 160,176 (139,364) 243 21,055
Income/(Loss) for the period - (2,564) - (2,564)
Other comprehensive income - - 13 13
Total comprehensive income/(loss) for the period 160,176 (141,928) 256 18,504
Transactions with owners in their capacity as owners
Issue of share capital - - - -
Transfer of Petromatad Singapore - 53 - 53
Cost of capital raising - - - -
Share based payments - - 149 149
As at 30 June 2024 160,176 (141,875) 405 18,706
1. CORPORATE INFORMATION
The financial report covers the consolidated entity of Petro Matad Limited and
its controlled entities.
Petro Matad Limited (Company) incorporated in the Isle of Man on 30 August
2007 has five wholly owned subsidiaries, which are: Capcorp Mongolia LLC and
Petro Matad LLC (both 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.
Petro Matad Limited trades on the Alternative Investment Market (AIM), which
is a sub-market of the London Stock Exchange, under the symbol MATD. Its major
shareholder is Petrovis Matad Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The half-year financial report does not include all of the notes of the type
normally included within the annual financial report and therefore cannot be
expected to provide as full an understanding of the financial performance,
financial position and financing and investing activities of the consolidated
entity as the full financial report.
The half-year financial report should be read in conjunction with the annual
Financial Report of Petro Matad Limited as at 31 December 2023. The half-year
consolidated financial statements have been prepared using the same accounting
policies as used in the annual financial statements for the year ended 31
December 2023.
It is also recommended that the half-year financial report is considered
together with any public announcements made by Petro Matad Limited and its
controlled entities during the half-year ended 30 June 2024.
(a) Basis of Preparation
The half-year consolidated financial report is a general purpose financial
report, which has been prepared in accordance with the requirements of
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ('IASB'). The half-year financial
report has been prepared on a historical cost basis, except where stated.
The financial report is presented in US dollars and all values are rounded to
the nearest thousand dollars ($'000).
For the purpose of preparing the half-year financial report, the half-year has
been treated as a discrete reporting period.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Group as at 31 December each year.
Subsidiaries are entities controlled by the Group. Control exists when the
Group has the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities. In assessing control,
potential voting rights that presently are exercisable or convertible are
taken into account. 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.
3. CONTRIBUTED EQUITY
CONSOLIDATED
30 Jun 2024 31 Dec 2023
$'000 $'000
Ordinary shares (i) 160,176 160,176
1,113,883,601 shares issued and fully paid.
(31 Dec 2023: 1,113,883,601)
160,176 160,176
(i) Ordinary shares
Full paid ordinary shares carry one vote per share and carry the right to
dividends.
Movement in ordinary shares on issue Number of Shares Issue Price$ $'000
At 1 January 2024 1,113,883,601 160,176
No transactions during the period - - -
At 30 June 2024 1,113,883,601 160,176
4. RESERVES
A detailed breakdown of the reserves of the Group is as follows:
Equity benefits reserve Foreign currency translation Total
Merger reserve
Consolidated $'000 $'000 $'000 $'000
As at 1 July 2023 831 593 (1,363) 61
Currency translation differences - - 21 21
Expiry of Options - (2) - (2)
Share based payments - 163 - 163
As at 31 December 2023 831 754 (1,342) 243
Currency translation differences - - 13 13
Share based payments - 149 - 149
As at 30 June 2024 831 903 (1,329) 405
EARNINGS/(LOSS) PER SHARE
The following reflects the income and share data used in the total operations
basic and diluted earnings/(loss) per share computations:
CONSOLIDATED
30 Jun 30 Jun
2024 2023
Basic earnings/(loss) per share
Total basic earnings/(loss) per share (US$ cents per share) (note a) (0.23) (0.18)
Diluted earnings/(loss) per share
Total diluted earnings/(loss) per share (US$ cents per share) (note b) (0.23) (0.18)
(a) Basic earnings/(loss) per share
The profit/(loss) and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
Net profit/(loss) attributable to ordinary shareholders (US$'000) (2,564) (1,902)
Weighted average number of ordinary shares for the purposes of basic earnings 1,113,884 1,067,531
per share ('000)
(b) Diluted earnings/(loss) per share
The profit/(loss) and weighted average number of ordinary shares used in the
calculation of diluted earnings per share are as follows:
Net profit/(loss) attributable to ordinary shareholders (US$'000) (2,564) (1,902)
Weighted average number of ordinary shares for the purposes of basic earnings 1,113,884 1,067,531
per share ('000)
Share Options and Conditional Share Awards could potentially dilute basic loss
per share in the future, however they have been excluded from the calculation
of diluted loss per share because they are anti-dilutive for both years
presented.
5. EVENTS AFTER THE REPORTING DATE
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.
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.
On 1 July 2024, the Company issued 43,307,084 shares through direct
subscriptions at a price of GBP0.020 per share.
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.
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