REG - Petro Matad Ltd - Operational Update

Petro MatadAnnouncement

05/11/2025 07:00

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RNS Number : 2716G  Petro Matad Limited  05 November 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')

Operational Update

LONDON, 5 November 2025: Petro Matad Limited, the AIM quoted Mongolian oil
company, is pleased to provide the following operational update.

Key updates

·    The Gazelle-1 well, which was tested in October, has been brought
onto production at an initial rate of 200 barrels of oil per day (bopd).

·    Heron-2 re-test is ongoing.

·    Heron-1 reached the first anniversary of production start-up with c.
60,000 barrels (bbls) having been produced to date.

·    Production from Gazelle 1 is being processed for export under the
existing Oil Sales Agreement with PetroChina and progress is being made on
rewording the agreement to ensure 100% payment and payment of money withheld
to date.

 

Gazelle-1 on production

Following the successful well test of Gazelle-1 in October, surface facilities
have been installed and the well has been brought onstream. The first
shipments of Gazelle crude have been delivered to the Block XIX TA-1
processing and export facility under the existing Oil Sales Agreement.

Based on analysis of the pressure data acquired during the well test, the
initial production rate for Gazelle-1 has been set at 200 bopd. Well
performance will be closely monitored to determine if this rate can be
increased. Since the distance of the well from the oil water contact within
the trap is not known, a conservative approach is being taken on start up to
reduce the chance of early water breakthrough.

Production data from the well will help to refine the estimation of the
connected reservoir volume and to guide decisions on potential appraisal well
locations.

Heron-2 re-test

The temporary pumping facilities at Heron-2 initially proved much more
efficient than the preceding swabbing operation with approximately one third
of the remaining injected fluid quickly recovered. This comprised mainly
stimulation fluid but with an increasing percentage of oil. However, an
unexpected drop off in flow was observed which may indicate some form of down
hole mechanical issue or potentially an obstruction of the perforations.
Whilst this matter was being investigated the well had to be shut-in to
realign the beam pump. This work was completed and pumping operations have now
resumed. If the lower than expected fluid recovery rate continues, the well
will be shut in for the winter and further remediation options will be
evaluated.

Heron-1 update

24 October 2025 saw the first anniversary of production start up at the
Heron-1 well. In the first 12 months 298 deliveries of crude oil to the Block
XIX TA-1 facilities have been made with a total of 59,920 barrels of crude oil
offloaded.

This equates to an average production from the well over the year of 164 bopd.
The water cut remains stable at c. 3%. The production of Heron-1 is trending
in line with that observed in the basin as a whole with current daily
production of c. 145 barrels. Performance to date is comparable with some of
the better producers in the basin.

The infrastructure connecting Heron-1 to the national electricity grid is in
place and ready to be energised. The committee required under the regulations
to inspect and certify the installation and to approve its start up requires
sign off from the provincial governor and this has not yet been provided. We
are following up with the governor's office and we have sought the assistance
of industry regulator, the Mineral Resources and Petroleum Authority of
Mongolia (MRPAM), to expedite this so that the grid connection can be
commissioned and cost savings on power generation can start to be realised.
Until the grid connection is energised, power will continue to be supplied by
the onsite generator and operations will not be interrupted.

Oil Sales Agreement and payment update

Payments under the Oil Sales Agreement with Block XIX operator PetroChina have
been made up to and including the month of August. The invoice for September
production is being processed for payment and today we have submitted the
invoice for October.

Meetings have been held with PetroChina on the rewording of the Oil Sales
Agreement and we are pushing to finalise the matter and obtain their written
confirmation of the removal of the withholding and a firm date by which the
withheld amount will be paid.

 

Mike Buck, CEO of Petro Matad, said:

"Our operations team has worked hard to get the Gazelle-1 well ready for
production in short order. We will closely monitor well performance to
maximise production balanced with prudent reservoir management. We are very
pleased to be able to increase production and revenue generation so quickly
after the successful Gazelle-1 well test and to add this to the consistent
performance of Heron-1.

Meanwhile, Heron-2 continues to present challenges. We still hope to get an
oil rate out of the well this year or, at the very least, enough information
to allow us to prepare for another operationally appropriate attempt to do so
after this winter's operational shut down.

PetroChina has been slow to respond on the rewording of the oil sales
agreement but progress is being made."

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

 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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