REG - Petro Matad Ltd - Operational Update

Petro MatadAnnouncement

19/12/2023 07:00

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RNS Number : 2180X  Petro Matad Limited  19 December 2023

Petro Matad Limited

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

Operational Update

LONDON, 19 December 2023: Petro Matad Limited, the AIM quoted Mongolian oil
company, provides the following operational update.

Key Company Updates

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

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

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

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

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

Operational Update

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

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

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

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

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

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

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

 

Mike Buck, CEO of Petro Matad, said:

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

Further operational updates will be provided in due course.

 

 

- 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)                            +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 focussed on oil exploration, as
well as future development and production in Mongolia. At the current time,
Petro Matad holds 100% working interest and the operatorship of two Production
Sharing Contracts with the Government of Mongolia. Block XX has an area of 218
square kilometres in the far eastern part of the country and Block V has an
area of 7,937 square kilometres in the central western 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.

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