Final results for year ended 31 December 2025
25 June 2026
Petro Matad Limited
("Petro Matad" or the "Company")
Final results for year ended 31 December 2025
Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil company is pleased to announce its audited final results for the year ended 31 December 2025. All monetary values are expressed in United States dollars unless otherwise stated.
2025 Financial Highlights
· As of 31 December 2025, the Group's cash position was $3.67 million inclusive of Financial Assets (31 December 2024: $2.96 million, excluding receivables).
· The Group's net loss after tax for the twelve months ended 31 December 2025 was $4.23 million (31 December 2024: loss $10.92 million).
· An equity raise was completed in mid-July 2025 to fund activities directed at increasing production.
· Oil sales in 2025 generated revenue net to Petro Matad of c.$2 million selling at an average price for the year of $61.8 per barrel.
2025 Operational Highlights
· Heron-1 maintained production up-time of over 99% throughout 2025, delivering total oil sales of c.54,000 barrels to PetroChina's neighbouring TA-1 facility by year-end.
· A successful well test at Gazelle-1 in October delivered a maximum rate of over 400 barrels of oil per day ("bopd") on natural flow. The well was brought onstream by the end of October and oil sales totalling over 7,000 barrels from Gazelle-1 were achieved by year-end.
· Production from Block XX in 2025 averaged 168 bopd.
· An Oil Sales Agreement was signed with PetroChina in April 2025. A 30% revenue withholding by PetroChina related to Mongolian tax treatment was fully resolved by year-end with all 2025 payments made.
· Farm out discussions on the Company's Mongolian portfolio with potential farminees began in early 2025 and continued throughout the year.
· Sunsteppe Renewable Energy (SRE) was very active and identified several attractive projects. Good progress was made on its 200MW Hybrid project in Tuv Province.
Mid-2026 Update
· Production from Heron-1 has continued as forecast and production from Gazelle-1 has exceeded expectations post the period end. Average production year to date is 233 bopd. In April 2026 the Company reached the milestone of its first 100,000 barrels produced thanks to the diligent efforts of the Field Operations team.
· The increase in oil price in 2026 compared to 2025 benefits the Company in that Mongolian fiscal terms are favourable and the contractor's return increases in proportion to the increase in the oil price.
· Block XX farm-out discussions are continuing, and with the significant rise in the oil price, an uptick in interest has been shown by a number of potentially interested parties. The farmout initiative is a major focus during 2026 and further announcements regarding progress will be made in due course, as appropriate.
· As was the case in 2025, negotiations on the annual Oil Sales Agreement with PetroChina have been slow in 2026, but finally PetroChina has approved the revised wording and has also agreed to reduce the handling fee included in the contract. With the agreement now approved, the Company will submit its invoice for the Block XX 2026 production year to date which totals over 40,000 barrels. It is hoped that the lengthy discussions on the 2026 Oil Sales Agreement, including detailed analysis of the applicable tax treatment and appropriate optimisation will facilitate a smoother and much quicker approval of a similar contract for 2027.
· Discussions are continuing on the potential to acquire 3D seismic on Block XX during the summer of 2026.
· On renewable energy, SRE continues to focus on its 200MW Hybrid project, which is the most likely of its existing portfolio to achieve ready to build status in the near term. Meanwhile, the government is now actively pushing renewables projects forward. SRE did not to participate in recent competitive bidding on five government auctions of solar projects in the 20MW to 50MW range as the timeframe for delivery is extremely tight and penalties will be imposed if deadlines are missed. However, SRE is already very active in 2026. In addition to the 200MW Hybrid project, discussions to secure a 100MW solar/100MW battery fast track project are ongoing, an expression of interest has been submitted for a 100MW wind project the marketing of which is being managed by the International Finance Corporation and SRE is also part of a consortium chosen as the preferred bidder to negotiate terms on a 90MW solar/battery project with the Ulaanbaatar municipality.
Mike Buck, CEO of Petro Matad, said:
"2025 was a standout year for Petro Matad with continuing production from Heron-1 and the exciting addition of Gazelle-1 in the fourth quarter. The generation of a revenue stream for the Company is a major achievement and our focus in 2026 is on seeking a partner to join us to accelerate production and revenue. Whilst the Block XX farm-out negotiations in 2025 were frustratingly slow, the post-period increase in interest is encouraging.
We are pleased that PetroChina has finally approved the 2026 Oil Sales Agreement and the dedication of the team that made a huge effort to get this across the line is much appreciated.
SRE's progress through 2025 was mixed, with some counterparties moving slower than we had hoped but we are currently focused on some large projects which have aggressive but realistic timeframes and so have the potential for rapid value crystallisation".
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. The Company also has a 50% holding in the SunSteppe Renewable Energy joint venture pursuing utility scale renewable energy projects in 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
Harry Davies-Ball
+44 (0) 20 7408 4090
Zeus (Joint Broker)
Simon Johnson
Louisa Waddell
+44 (0) 20 3829 5000
FTI Consulting (Communications Advisory Firm)
Ben Brewerton
Christopher Laing
+44 (0) 20 3727 1000
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.
Directors' Statement 2025
Summary
2025 proved to be a successful year for Petro Matad, with continuing production from Heron-1 and Gazelle-1 coming onstream in late October following a successful well test. Produced crude from both wells was exported without incident to China under an Oil Sales Agreement which PetroChina signed in April 2025. Monthly oil sales payments ensued and although PetroChina withheld 30% pending confirmation on tax treatment in Mongolia, by year end the withholding issue was resolved and all 2025 payments were made. The Mineral Resources and Petroleum Authority of Mongolia (MRPAM) continued to be very supportive especially in the Company's efforts to expedite production activities at Gazelle-1.
On Block XX, production activities continued at Heron-1 with 245 shipments of crude oil made to PetroChina's TA-1 processing facility during the year. A well planned maintenance schedule resulted in production up-time of over 99%. The well continues to produce on forecast with water cut of the exported crude remaining stable at c.3%. There were no indications of wax build-up or sand production during the year such that interventions for 'hot oil' wash or installation of sand screens were not required. Connection of the Heron-1 well pad to the nearby electricity grid was successfully completed resulting in reduction of both operating costs and emissions. By the end of 2025, sales oil from Heron-1 totalled c. 54,000 barrels.
A well test performed at Gazelle-1 in October proved to be very successful with a maximum rate of over 400 barrels per day (bopd) with no water achieved on natural flow. Following this the well was quickly completed, surface infrastructure comprising a beam-pump and single elevated production tank was installed with first oil achieved by the end of the month. Once on production, water breakthrough, which had been anticipated, was observed and this rose to in excess of 30% of total fluid. A production optimisation effort was successful and the water cut was reduced to 20% and has remained stable at this rate since. By the end of 2025 oil sales from Gazelle-1 totalled over 7,000 barrels.
The average production from Block XX in 2025 was 168 bopd and the average realised price was $61.8 per barrel.
With the focus on getting Gazelle-1 onstream before the winter, there was insufficient time to perform a well test on the suspended Gobi Bear-1 well in 2025 where a geochemical study identified migrated oil in cuttings samples from the reservoir section. Whilst this was positive support to log interpretation of a possible oil zone in the well, it is not conclusive. A well test is being discussed with contractors for execution during 2026.
The Block VII PSC was signed in January 2025 and the Exploration License was issued. Desk top studies, field trips and retrieval of all existing data were executed during the year.
As part of a farm out strategy adopted and announced in early 2025, discussions on Block XX continued throughout the year with one party making a due diligence visit to the field. Negotiations were continuing at year end and other parties were also reviewing data.
Post the reporting period production from the Heron and Gazelle wells has continued at and above expectations and in April 2026 total sales oil reached 100,000 barrels marking a significant milestone for the Company and the Field Operations team.
Sunsteppe Renewable Energy (SRE), the Company's renewables Joint Venture was very active through the year and identified several attractive project opportunities. The 200MW Hybrid project in Tuv Province was identified as the most likely of SRE's portfolio projects to achieve ready to build status quickly and work was focused on progressing it. A wind mast was installed in December to start gathering data and phase one of the project comprising 100MW of solar and battery storage was prioritised. The feasibility study was completed in December 2025 and submitted to the Ministry of Energy for approval. In 2026, government changes slowed the approval of the feasibility study but the Ministry of Energy has recently generated new momentum in the renewable energy sector and a number of new, sizeable opportunities are under review by SRE.
Health Safety Security and Environment (HSSE)
The Company's Health, Safety, Security, and Environment Management System (HSSE MS) is designed to adhere to best practices set by the International Association of Oil & Gas Producers (IOGP).
Petro Matad, along with its contractors and subcontractors, remain committed to complying with all applicable Mongolian laws, regulations, and national standards throughout the Company's operations. In its annual evaluation of the Company's environmental compliance, Dornod Aimag Environmental Implementation Committee awarded Petro Matad an overall score of 96.4% for its Block XX Environmental Implementation Report, demonstrating the Company's continuing high performance. The Company remains committed to environmental protection, implementing measures to achieve compliance with both national and international best practices, with ISO 14001 serving as a key benchmark for environmental management.
After nine consecutive years without a Lost Time Injury (LTI), one LTI was recorded in 2025. This incident involved a Production Operator who sustained a minor hand injury, and he could not return to work until medically cleared. Classified as an LTI, the subsequent investigation included lessons learned which have been incorporated into the Company's ongoing safety improvement initiatives to prevent recurrence.
In accordance with Mongolian legislation and international best practices, all HSSE incidents are investigated, documented, and classified in line with IOGP guidelines. Lessons learned are disseminated throughout the organisation and integrated into management review processes for continuous improvement.
As the Company transitioned from exploration to production operations, with producing wells at Heron-1 and Gazelle-1, maintaining high standards of safety, environmental performance, operational integrity, and regulatory compliance remained key priorities. All production and supporting equipment at the Heron-1 and Gazelle-1 well sites undergo routine inspection, servicing, and preventative maintenance programmes in accordance with the manufacturers' specifications and operational requirements. This approach supports operational reliability while minimizing risks to personnel, the environment, and Company assets.
In accordance with Mongolian regulatory requirements, appropriate safety, operational, and environmental signage is maintained throughout the Company's production facilities. These measures enhance workforce awareness, emergency preparedness, and safe operating practices across all operational areas.
Operations
Block XX: Following the successful fund raise completed in mid-July 2025, contracts for the various contractor services required were finalised, mobilisation notices issued and work commenced in late August for a re-test of the Heron-2 well. After an initial phase of swabbing that did not result in any improvement in fluid recovery from that observed on original well testing in 2024 an acid wash was performed. This went well with all injected fluid taken by the reservoir and subsequent swabbing recovered better rates initially with an increasing percentage of oil, but these rates then fell back. In order to improve the efficiency of fluid recovery, a beam-pump was installed and the majority of the acid wash fluid was recovered along with oil before the well was shut-in for the winter months. Monitoring of the fluid level in the well over the winter showed a consistent but slow ingress from the reservoir into the well bore. Going forward, we are investigating the merits of recommencing pump out activities at Heron-2 and also the use of radial drilling stimulation technology is being considered given reported successful application of this technology in some wells in the adjoining Block XIX. Whilst the flow performance of Heron-2 to date is lower than the nearby good producer at Heron-1, we remain hopeful that once all injected fluids have been recovered this may allow better oil rates to be achieved especially if further stimulation can be effectively deployed.
Production operations at Heron-1 continued without incident during 2025 and a well planned maintenance schedule resulted in production up-time of over 99%. A total of 245 shipments of crude oil were made to PetroChina's TA-1 offloading facility during the year with oil rates as per forecast and water-cut values of the sales oil remaining stable at c.3%. The project to extend the 10kV regional electricity grid to Heron to power the beam-pump and related equipment was completed in December. Since then consumption of diesel has been reduced significantly as have the associated emissions. As a result monthly operating costs were reduced by c. 15%.
By the end of 2025 sales oil from Heron-1 for the year totalled c.54,000 barrels.
Well test operations at the Gazelle-1 oil discovery drilled in 2019 started in early October 2025 with an 8 metre zone perforated across two reservoir units initially delivering over 400 bopd on natural flow. With an API gravity of 40-43°, the oil is very similar to the Heron-1 crude. No water was observed during the test. The excellent well test result justified the completion of the well and installation of production facilities. First oil was achieved by the end of October. The well was able to flow to surface naturally for a short time before the beam pump was required. Early water breakthrough had been anticipated at Gazelle-1 due to the uncertain standoff of the perforated interval from water bearing sands and this was borne out in the early days of production with water cut increasing to more than 30%. Production optimisation efforts were successful in reducing and stabilising the water cut at c.20%. By the end of 2025, sales oil from Gazelle-1 totalled over 7,000 barrels.
Regarding the Gobi Bear-1 well that was suspended in October 2024 and in which some oil shows had been observed and where petrophysical evaluation of wireline logs suggested a possible zone of interest, a geochemical evaluation on cuttings samples was commissioned to determine if migrated oil was present. The results of this study were positive and interestingly, and despite the shallow depth of the well, early mature source rocks were confirmed within the Tsagaantsav Formation. This is a positive result for the prospectivity of the southern part of Block XX in proving that it is within the migration halo of the source kitchen. Overall, the analyses conducted were still not definitive and a well test was planned. However, getting Gazelle-1 onstream took precedence and there was insufficient time to perform a Gobi Bear-1 well test before the onset of winter. Returning to Gobi Bear-1 for a well test remains in the Company's plans and in 2026 discussions were resumed with the testing contractor to determine a cost-effective operation and optimal timing.
The farm out initiative launched in 2025 generated interest from three counterparties initially. One counterparty undertook a due diligence visit to Mongolia and, post the reporting period, they have continued their technical evaluation. Meanwhile, the increase in the oil price and the global impact of the situation in the Persian Gulf has heightened interest in Petro Matad's portfolio from potential partners and discussions are continuing with a number of companies.
Block VII: Securing the formal Exploration Licence allowing the Company to pursue exploration activities on the block took longer than anticipated but was finally issued in October 2025. A scouting trip to the block was conducted including a visit to the rig that the previous operator had abandoned at the site of the only exploratory well drilled so far in the area. Drill cuttings samples from the well were collected for use in future studies. The seismic tapes for the 400km 2D survey that was acquired by the same operator were located and are being interpreted. The Company is actively seeking partners to join in exploring this large block and has received expressions of interest from companies who have interests in the proven producing Yin'e Basin in China, immediately to the south.
Sunsteppe Renewable Energy (SRE)
The Company's renewable energy vehicle made progress on its portfolio through 2025. In addition to the Green Hydrogen project with Oyu Tolgoi mine, the Choir 50MW/150MWh battery energy storage project and the 1.5GW export to China project, SRE identified that its 200MW Hybrid project in Tuv Province was the one with the best potential to reach ready to build status rapidly.
On the other projects in the portfolio, the Oyu Tolgoi project continued to move at a slow pace despite SRE's efforts, but SRE was able to secure Japanese government agreement to extend the grant on the project. SRE's Choir 50MW battery storage project has been delayed whilst the government has prioritised its auction of five solar projects. The battery project is likely to be part of a subsequent auction process. SRE did not to participate in the solar project auctions where the timeframe for project delivery was deemed to be too tight and penalties will be imposed if deadlines are missed. SRE's high potential 1.5GW export to China project is awaiting government to government agreements to be signed and progress was seen at a high level towards this end.
Meanwhile the 200MW Hybrid project has a partner very keen to move at the rapid pace that SRE is targeting. By December 2025, a wind mast had been erected at the site and the feasibility study for the solar and battery portion of this project had been completed and submitted to the Ministry of Energy for review and approval.
Post the reporting period, changes at cabinet level in Mongolia slowed the Ministry of Energy approvals process but with new urgency now injected into renewable energy projects, SRE is well placed to exploit this momentum. In addition to the 200MW Hybrid project, discussions to secure a 100MW solar/100MW battery fast track project are ongoing. SRE has submitted an expression of interest to be involved in bidding for a 100MW wind project that the International Finance Corporation is managing on behalf of the government and is also part of a consortium chosen as the preferred bidder to negotiate terms on a 90MW solar/battery project with the Ulaanbaatar municipality. Like the 200MW Hybrid project, the fast track project and the Ulaanbaatar project have willing counterparties, aggressive but realistic timeframes and so have the potential to crystallise value for SRE in the near term.
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 accordance with the Block XX PSC, Petro Matad and the Governor of Matad Soum concluded an Agreement on Environmental Protection and Support for Community Development for 2025 valued at c.$150,000. The Governor subsequently sent a letter of appreciation in recognition of Petro Matad's support of the local community.
For its production operations, Petro Matad recruited locally and put in place a comprehensive training programme for the operators hired. During operational activities, a doctor stationed at the project site provided basic primary healthcare services to herder families living nearby.
Conclusions
It was an active and positive year for the Company with continuing production from Heron-1 and with the highlight of production also starting at Gazelle-1. The cooperation with PetroChina for the sale of Block XX crude has not been without challenges but this partnership offers the Company the best commercial solution to secure revenue from its early production operations. The farm out initiative is generating more interest after upheavals in the global energy situation and the Company's renewable energy joint venture has some sizeable opportunities to start crystallising the value it has created. The Company looks forward to advancing both streams of its business and creating value for shareholders.
Acknowledgements
The Company is grateful for the support it has received from the Mongolian authorities through the year, particularly in facilitating production startup at Gazelle-1 so promptly. The Company appreciated the cooperation of neighbouring operator PetroChina for providing a route to commercialise Block XX's early production.
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 and constructive input are also highly appreciated.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2025
Consolidated
31 Dec 2025
31 Dec 2024
Note
$'000
$'000
Continuing operations
Revenue
Operating income
4(a)
2,921
626
Cost of Goods Sold
4(a)
(940)
(172)
1,981
454
Interest income
4(a)
51
193
Other income
4(a)
21
1
72
194
Expenditure
Consultancy fees
(140)
(124)
Depreciation and amortisation
4(b)
(1,344)
(463)
Employee benefits expense
4(c)
(1,397)
(2,271)
Exploration, exploitation and evaluation expenditure
4(d)
(963)
(5,044)
Other expenses
4(e)
(1,488)
(1,924)
Share of loss from equity accounted investments
4(f)
(950)
(1,738)
(Loss)/Profit from continuing operations before income tax
(4,229)
(10,916)
Income tax expense
5
-
-
(Loss)/Profit from continuing operations after income tax
(4,229)
(10,916)
Net (loss)/profit for the year
(4,229)
(10,916)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations, net of income tax of $Nil (2024: $Nil)
(27)
2
Other comprehensive (loss)/income for the year, net of income tax
(27)
2
Total comprehensive (loss)/income for the year
(4,256)
(10, 914)
(Loss)/Profit attributable to owners of the parent
(4,229)
(10,916)
Total comprehensive (loss)/income attributable to owners of the parent
(4,256)
(10,914)
(Loss)/Earnings per share (cents per share)
Basic (loss)/earnings per share
6
(0.3)
(0.8)
Diluted (loss)/earnings per share
6
(0.3)
(0.8)
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 2025
Consolidated
31 Dec 2025
31 Dec 2024
Note
$'000
$'000
ASSETS
Current Assets
Cash and cash equivalents
7
3,093
1,987
Trade and other receivables
8
1,706
698
Prepayments
9
140
123
Financial assets
10
-
968
Inventory
11
210
223
Total Current Assets
5,149
3,999
Non-Current Assets
Exploration and evaluation assets
12
14,187
15,084
Financial assets
10
575
-
Property, plant and equipment
13
699
510
Right-of-Use asset
13
112
103
Petroleum asset
13
307
503
Investments in SunSteppe
14
613
663
Total Non-Current Assets
16,493
16,863
TOTAL ASSETS
21,642
20,862
LIABILITIES
Current Liabilities
Trade and other payables
15
2,103
961
Lease liability
15
116
109
Total Current Liabilities
2,219
1,070
Non-Current Liabilities
Decommissioning provision
16
595
562
Total Non-Current Liabilities
595
562
TOTAL LIABILITIES
2,814
1,632
NET ASSETS
18,828
19,230
EQUITY
Equity attributable to owners of the parent
Issued capital
17
172,792
169,009
Reserves
18
488
448
Accumulated losses
(154,452)
(150,227)
TOTAL EQUITY
18,828
19,230
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 2025
Consolidated
31 Dec 2025
31 Dec 2024
Note
$'000
$'000
Cash flows from operating activities
Proceeds from sale of crude oil
2,113
-
Payments to suppliers and employees
(3,826)
(9,994)
Interest received
51
192
Net cash flows (used in)/provided by operating activities
7
(1,662)
(9,802)
Cash flows from investing activities
Purchase of property, plant and equipment
(321)
(344)
Proceeds from sale of financial assets
393
2,561
Investment in SunSteppe
(900)
283
Proceeds from the sale of property, plant and equipment
-
-
Net cash flows used in investing activities
(828)
2,500
Cash flows from financing activities
Proceeds from issue of shares
4,036
9,390
Capital raising cost
(253)
(557)
Payments of lease liability principal
(160)
(49)
Net cash flows from financing activities
3,623
8,784
Net (decrease)/increase in cash and cash equivalents
1,133
1,482
Cash and cash equivalents at beginning of the year
1,987
503
Net foreign exchange differences
(27)
2
Cash and cash equivalents at the end of the year
7
3,093
1,987
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 2025
Consolidated
Attributable to equity holders of the parent
Issued
Capital
Accumulated Losses
Other
Reserves
Total
Note 18
Note
$'000
$'000
$'000
$'000
As at 1 January 2024
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
17
9,390
-
-
9,390
Cost of capital raising
17
(557)
-
-
(557)
Transfer of Petro Matad Singapore
-
53
-
53
Share-based payments
17 & 18
-
-
203
203
Exercise of Conditional Share Awards
17, 18 & 19
-
-
-
-
Expiry of Options
18 & 19
-
-
-
-
As at 31 December 2024
169,009
(150,227)
448
19,230
Net loss for the year
-
(4,229)
-
(4,229)
Other comprehensive income
-
-
(27)
(27)
Total comprehensive gain/(loss) for the year
-
(4,229)
(27)
(4,256)
Issue of share capital
17
4,036
-
-
4,036
Cost of capital raising
17
(253)
-
-
(253)
Share-based payments
18 & 19
-
-
71
71
Exercise of Conditional Share Awards
17, 18 & 19
-
-
-
-
Expiry of Options
18 & 19
-
4
(4)
-
As at 31 December 2025
172,792
(154,452)
488
18,828
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 2025
1 Corporate information
The financial report of Petro Matad Limited (Company) for the year ended 31 December 2025 was authorised for issue in accordance with a resolution of the Directors dated 23 June 2026 which was approved on 25 June 2026.
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 seven wholly owned subsidiaries, which are: Capcorp Mongolia LLC, Petro Matad LLC and Petro Matad Energy LLC (all incorporated in Mongolia), Central Asian Petroleum Corporation Limited (Capcorp) and Petromatad Invest Limited (both incorporated in the Cayman Islands), as well as Petro Matad Energy Limited and Petro Matad Resources Limited (both 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 activities during 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 15.54% of the shareholding at the end of 2025.
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 $4.23 million for year 2025 (2024 Loss: $10.92 million) and experienced net cash outflows from operating activities of $1.66 million (2024 Outflow: $9.80 million). In addition, as outlined in Note 20(b) the Group is required to meet minimum exploration commitments on its Block XX and Block VII Production Sharing Contract (PSC) of approximately $5.61 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 $4.04 million in July 2025, which provided sufficient working capital for ongoing operations including well testing and well completion operations of Gazelle-1 well, optimising production operations, and investing in high-graded renewable energy projects through its interest in SunSteppe.
The Company believes that the current cash balance is sufficient to continue operations until at least July 2027. The commencement of production operations in late 2024 has provided the Company with a revenue source that is expected to continue beyond 2027, thereby enhancing the Company's ability to remain a going concern. While not included in the cashflow forecast, commencement of revenue from renewable projects is expected to occur within the next few years. It is also important to note that the Company can access loans up to $1.5 million from Petrovis under an existing loan agreement.
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 in line with IFRS (European Union) that are relevant to its operations.
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.
(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.
(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 is 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 is 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.
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 are 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) Joint arrangements
Currently Petro Matad accounts for its interest in SunSteppe as an investment under equity method of accounting. SunSteppe is the operator of the venture and employs its own management and staff.
Judgement is required to determine when the Group has joint control, which requires an assessment of the relevant activities and when the decisions in relation to those activities require unanimous consent. The Group has determined that the relevant activities for its joint arrangements relate to the operating and capital decisions of the arrangement, such as the approval the capital expenditure programme for each year, and appointing, remunerating and terminating the key management personnel of, or service providers to, the joint arrangement. The considerations made in determining joint control are similar to those necessary to determine control over subsidiaries.Judgement is also required to classify a joint arrangement as either a joint operation or joint venture. Classifying the arrangement requires the Group to assess their rights and obligations arising from the arrangement. Specifically, it considers:
• The structure of the joint arrangement - whether it is structured through a separate vehicle
• When the arrangement is structured through a separate vehicle, the Group also considers the rights and obligations arising from:
• The legal form of the separate vehicle
• The terms of the contractual arrangement
• Other facts and circumstances (when relevant)
This assessment often requires significant judgement, and a different conclusion on joint control and also whether the arrangement is a joint operation or a joint venture, may materially impact the accounting
Interests in Joint Arrangements
Joint ventures represent the contractual sharing of control between parties in a business venture where unanimous decisions about relevant activities are required.
Joint operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure to each liability of the arrangement. The Group's interests in the assets, liabilities, revenue and expenses of the joint operations are included in the respective line items of the financial statements. Information about the joint arrangements is set out in Note 14.
All of the Group's current joint arrangements are treated as joint operations.
(x) 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.
The Company sells its produced crude from Block XX to ultimate buyer, China Oil United Petroleum via PetroChina Daqing Tamsag Mongolia XIX Co., Ltd who is operator of neighbouring Block XIX under a Crude Oil Entrustment, Processing and Sales Agreement established in 2025.
31 Dec 2025
31 Dec 2024
$'000
$'000
4 Revenues and expenses
(a) Revenue
Operating income - Oil sale revenue
2,921
626
Cost of Goods Sold:
Transportation and services
(751)
(131)
Royalty paid to MRPAM
(189)
(41)
1,981
454
Interest income
51
193
Other income:
Other income
21
1
72
194
(b) Depreciation and Amortization
Depreciation of assets over useful life
Amortization of evaluation assets on unit of production basis
Depreciation - Property and Plant Equipment
116
72
Depreciation - Right-of-Use asset
155
154
Depreciation - Petroleum Asset (Decommissioning Reserve)
175
46
Capitalized - Petroleum Asset
898
191
1,344
463
(c) Employee benefits expense
Included in employee benefits expense are the following:
Wages and salaries
1,152
1,886
Bonuses
-
-
Non-Executive Directors' fees (including
Directors of affiliates)
150
146
Consultancy fees
24
36
Share-based payments
71
203
1,397
2,271
(d) Exploration, exploitation and evaluation expenditure
Exploration, exploitation and evaluation expenditure relates to the following PSCs:
Block XX - Exploitation
935
5,037
Block VII - Exploration
28
7
963
5,044
(e) Other expenses
Included in other expenses are the following:
31 Dec 2025
31 Dec 2024
$'000
$'000
Administration costs
1,084
1,043
PSC administration costs
211
201
Production bonus
-
500
Audit fees
69
64
Travel expenses
124
116
1,488
1,924
(f) Share of loss from equity accounted investments
SunSteppe costs
950
1,738
950
1,738
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
(4,229)
(10,916)
Income tax benefit calculated at 10%
(i)
422
1,091
Effect of different tax rates on entities in different jurisdictions
(ii)
(289)
(293)
Change in unrecognised deferred tax assets
(133)
(798)
-
-
(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, Petro Matad Energy Limited and Petro Matad Resources 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 2025
31 Dec 2024
cents per share
cents per share
Basic (loss)/earnings per share
(0.3)
(0.8)
Diluted (loss)/earnings per share
(0.3)
(0.8)
$'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
(4,229)
(10,916)
Weighted average number of ordinary shares for the purposes of diluted (loss)/earnings per share (in thousands)
1,654,862
1,299,390
Weighted average number of ordinary shares for the purposes of basic (loss)/earnings per share (in thousands)
1,654,862
1,299,390
31 Dec 2025
31 Dec 2024
$'000
$'000
7 Cash and cash equivalents
Cash at bank and in hand
3,093
1,987
3,093
1,987
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 $3,093,000 (2024: $1,987,000) 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
(4,229)
(10,916)
Adjustments for:
Depreciation and amortisation
1,344
463
Share based payments
71
203
Decommissioning provision
54
13
Unrealised foreign exchange (gains)/ losses
39
1
Transfer of Petro Matad Singapore
-
53
Other income
(21)
-
SunSteppe costs
950
-
Changes in assets and liabilities
Decrease/(increase) in trade and other receivables
(1,008)
(260)
Decrease/(increase) in prepayments
(17)
36
Decrease/(increase) in inventory
13
(8)
Increase/(decrease) in trade and other payables
1,142
613
Net cash flows used in operating activities
(1,662)
(9,802)
Non-cash investing and financing activities
There were no non-cash investing or financing activities undertaken in the 2025 financial year or prior year (2024: $0.00).
31 Dec 2025
31 Dec 2024
$'000
$'000
8 Trade and other receivables
Current
Other debtors
1,706
698
1,706
698
All amounts are recoverable and are not considered past due or impaired.
2025 account receivables include oil sales revenue due from PetroChina Daqing Tamsag Mongolia XIX Co., Ltd for the crude oil produced and delivered, for which receipt of a certain amount of the sales revenue was pending at end 2025.
9 Prepayments
Prepayments
140
123
140
123
10 Financial assets
Long Term Deposits
575
968
575
968
The Group holds term deposits with an average weighted interest rate of 5.89%. 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.
11 Inventory
Raw materials
210
223
210
223
Inventory are mainly consumables, including casing, mud and drilling materials purchased for Block XX.
12 Exploration and evaluation assets
Exploration and evaluation assets
14,187
15,084
14,187
15,084
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.
Evaluation assets are amortized on a unit of production basis.
31 Dec 2025
31 Dec 2024
$'000
$'000
13 Property, plant and equipment, Right-of-Use asset and Petroleum asset
Plant and equipment at cost
1,514
583
Accumulated depreciation and impairment
(815)
(73)
699
510
Right-of-Use asset
167
137
Accumulated depreciation - Right-of-Use asset
(55)
(34)
112
103
Petroleum asset
527
549
Accumulated depreciation - Petroleum asset
(220)
(46)
307
503
Reconciliation of carrying amounts at the beginning and end of the year:
Plant and equipment
Total
Right-of-Use asset
Total
Petroleum asset
Total
Total
$'000
$'000
$'000
$'000
As at 1 January 2024 (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
Additions
322
167
-
489
Foreign exchange
(17)
(3)
(21)
(41)
Depreciation charge for the year
(116)
(155)
(175)
(446)
As at 31 December 2025 (net of accumulated depreciation)
699
112
307
1,118
The following useful lives are used in the calculation of depreciation: Plant and equipment - 2 to 10 years
14 Investment in SunSteppe
On 30 January 2023, Petro Matad Limited entered into a heads of agreement with Sunsteppe Energy LLC to become joint ventures partners to develop renewables projects. On 20 February 2024, the Company transferred a 50% ownership interest in Petro Matad Singapore Pte. Ltd. to Sunsteppe Energy LLC. Subsequently, Petro Matad Singapore Pte. Ltd. was renamed Sunsteppe Renewable Energy Pte. Ltd.
Petro Matad Limited, as a funding shareholder, is required to contribute funding to the joint venture per the terms of the heads of agreement.
The Company's investment in Sunsteppe Renewable Energy Pte. Ltd. (SunSteppe) is accounted for using the equity method. The Company is funding shareholder in SunSteppe and does not have day to day operational control.
31 Dec 2025
31 Dec 2024
$'000
$'000
Current assets
397
13
Non-current assets
452
926
Current liabilities
(26)
(14)
Non-current liabilities
-
-
Net assets (100%)
823
925
Group's share of net assets (50%)
412
463
Carrying amount of interest in equity accounted investments
412
463
Profit/(Loss) for the period from continuing operations (100%)
(417)
(481)
Other comprehensive income / (expenses)
(583)
(1,628)
Total comprehensive income for the period from continuing operations (100%)
(1,000)
(2,109)
Losses arisen from initial application of equity method
(900)
(1,367)
Group's share of losses for the period (50%)
(950)
(1,738)
Investment in SunSteppe
Beginning balance
663
946
Additional capital contribution
900
1,367
Transfer of Petro Matad Singapore & Investment in SunSteppe
-
88
Share of loss under equity method
(500)
(1,055)
Share of impairment loss
(450)
(684)
Ending balance
613
663
During 2025, the Company made capital contributions of $0.90 million (2024: $1.36 million) in SunSteppe. For the year, the Company's recognised share of SunSteppe's loss under the equity method is $0.50 million (2024: $1.05 million). In addition, the Company recognised an impairment loss of $0.45 million, representing its share of losses in excess of the carrying amount of its investment in the joint venture, including the impact of funding contributions made during the year. Accordingly, the total loss recognized in respect of the joint venture for the year amounted to $0.95 million (2024: $1.74 million).
31 Dec 2025
31 Dec 2024
$'000
$'000
15 Trade and other payables (current)
Trade payables
2,103
961
Lease liability
116
109
2,219
1,070
Trade payables are non-interest bearing and are normally settled within 60 day terms.
16 Decommissioning Provision (Non-current)
Decommissioning provision
595
562
595
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.
17 Issued capital
31 Dec 2025
31 Dec 2024
$'000
$'000
Ordinary Shares
1,858,800,396 shares issued and fully paid
(2024: 1,483,883,601)
172,792
169,009
172,792
169,009
Movements in ordinary shares on issue:
Number of Shares
Issue
Price $
$'000
As at 1 January 2024
1,113,883,601
160,176
Placement shares through Shore Capital on 1 July 2024 (note (a))
189,311,666
$0.025
4,802
Placement shares through Zeus on 1 July 2024 (note (b))
117,381,250
$0.025
2,981
Direct subscription shares on 1 July 2024 (note (c))
43,307,084
$0.025
1,100
Open Offer shares on 1 July 2024 (note (d))
20,000,000
$0.025
507
Capital raising cost
(557)
As at 31 December 2024
1,483,883,601
169,009
Placement shares through Shore Capital on 18 July 2025 (note (e))
132,750,000
$0.011
1,425
Placement shares through Zeus on 18 July 2025 (note (f))
190,500,000
$0.011
2,051
Direct subscription shares on 18 July 2025 (note (g))
32,169,117
$0.011
350
Open Offer shares on 18 July 2025 (note (h))
19,497,678
$0.011
210
Capital raising cost
(253)
As at 31 December 2025
1,858,800,396
172,792
(a) 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
(b) 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.
(c) On 1 July 2024, the Company issued 43,307,084 shares through direct subscriptions at a price of GBP0.020 per share.
(d) 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.
(e) On 18 July 2025, the Company concluded a placing by issuing 132,750,000 shares at a price of GBP0.008 per share arranged through its nominated adviser, broker and joint book runner for the purposes of the Placing, Shore Capital Stockbrokers.
(f) On 18 July 2025, the Company concluded a placing by issuing 190,500,000 shares at a price of GBP0.008 per share arranged through its broker and joint book runner for the purposes of the Placing, Zeus Capital.
(g) On 18 July 2025, the Company issued 32,169,117 shares through direct subscriptions at a price of GBP0.008 per share.
(h) On 18 July 2025, the Company issued 19,497,678 shares to shareholders at a price of GBP0.008 per share through a retail offering.
18 Reserves
A detailed breakdown of the reserves of the Group is as follows:
Merger reserve
Equity benefits reserve
Foreign currency translation
Total
$'000
$'000
$'000
$'000
As at 1 January 2024
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
Currency translation differences
-
-
(27)
(27)
Expiry of Options
-
(4)
-
(4)
Exercise of Awards
-
-
-
-
Share based payments
-
71
-
71
As at 31 December 2025
831
1,024
(1,367)
488
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 19 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.
19 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, determined by management as of 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 2028.
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.
No Options have been issued during 2024 and 2025.
(c) Movement in Share Options
The weighted average fair value for all Options in existence as at 31 December 2025 is 0.04 (2024: 0.04).
Opening balance at 1 January 2024
Granted during the year
Lapsed during the year
Exercised during the year
Closing balance as at 31 December 2024
Exercisable as at 31 December 2024
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
-
Opening balance at 1 January 2025
Granted during the year
Lapsed during the year
Exercised during the year
Closing balance as at 31 December 2025
Exercisable as at 31 December 2025
Grant of options on 29 May 2023
11,388,000
-
166,000
-
11,222,000
-
11,388,000
-
166,000
-
11,222,000
-
Weighted Average Exercise Price (cents per option)
5.93
-
5.93
-
5.93
-
(d) Share Options Contractual Life
The weighted average remaining contractual life of outstanding share Options is 7.4 year (2024: 8.4 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 2024 and 2025.
(f) Movement in Conditional Share Awards
The weighted average fair value for all Awards in existence as at 31 December 2025 is 0.84 (2024: 0.84)
Consolidated
Opening balance at 1 January 2024
Granted during the year
Exercised during the year
Lapsed during the year
Closing balance
as at 31 December 2024
Exercisable 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
-
Consolidated
Opening balance at 1 January 2025
Granted during the year
Exercised during the year
Lapsed during the year
Closing balance
as at 31 December 2025
Exercisable as at 31 December 2025
Grant of Conditional Share Awards on 3 Jun 2008
123,750
-
-
-
123,750
41,250
Grant of Conditional Share Awards on 8 Apr 2009
60,000
-
-
-
60,000
20,000
Grant of Conditional Share Awards on 9 Jul 2010
214,500
-
-
-
214,500
71,500
Grant of Conditional Share Awards on 6 Apr 2011
18,000
-
-
-
18,000
6,000
Grant of Conditional Share Awards on 5 Jul 2011
135,000
-
-
-
135,000
45,000
Grant of Conditional Share Awards on 22 Nov 2011
37,500
-
-
-
37,500
12,500
Grant of Conditional Share Awards on 5 Dec 2011
21,450
-
-
-
21,450
7,150
Grant of Conditional Share Awards on 25 Apr 2012
75,000
-
-
-
75,000
25,000
Grant of Conditional Share Awards on 4 Dec 2012
2,250
-
-
-
2,250
750
Grant of Conditional Share Awards on 9 Jul 2013
90,000
-
-
-
90,000
30,000
777,450
-
-
-
777,450
259,150
Weighted Average Exercise Price (cents per award)
1.00
-
-
-
1.00
1.00
(g) Conditional Share Awards Contractual Life
The weighted average remaining contractual life of outstanding Conditional Share Awards is 2.5 years (2024: 3.5 years).
(h) Summary of Share Based Payments
A reconciliation of all share-based payments made during the year is as follows:
31 Dec 2025
31 Dec 2024
Note
$'000
$'000
Vesting of Options and Awards
18
71
203
71
203
31 Dec 2025
31 Dec 2024
Note
$'000
$'000
Lapsed Options
18
(4)
-
(4)
-
20 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 2025
31 Dec 2024
$'000
$'000
Operating Leases:
Within one year
54
66
After one year but not more than five years
-
-
Greater than five years
-
-
54
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. Block V PSC expired in July 2024 and the block has since been relinquished.
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 Block VII.
The amounts set out below do not include general and administrative expenses.
31 Dec 2025
31 Dec 2024
$'000
$'000
Production Sharing Contract Fees:
Within one year
310
87
After one year but not more than five years
434
434
Greater than five years
1,562
1,345
2,306
1,866
Minimum Exploration Work Obligations:
Within one year
416
-
Greater than one year but no more than five years
-
-
Greater than five years
5,195
5,168
5,611
5,168
During the year, it was identified that the minimum work and expenditure obligations disclosed for the year ended 31 December 2024 incorrectly included $0.98 million relating to the Block VII PSC. The Block VII PSC was executed in January 2025; accordingly, no contractual minimum obligation existed at 31 December 2024. The 2024 comparative commitments disclosure has been corrected to remove this amount. The error affects disclosure only and has no impact on the reported financial position, financial performance, or cash flows of the Group for any period presented.
21 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
2025
2024
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
Petro Matad Energy Limited
Isle of Man
100
100
Petro Matad Energy LLC
Mongolia
100
-
Petro Matad Resources Limited
Isle of Man
100
-
Joint Venture - Sunsteppe Renewable Energy Pte. Ltd. (formerly Petro Matad Singapore Pte. Ltd.)
Singapore
50
50
Joint Venture - 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. For the year 2025, the Company has made capital contributions of $0.90 million.
Petro Matad Energy Limited is 100% owned by Petro Matad Limited. Petro Matad Limited holds 50,000 Ordinary shares of $1 each.
Petro Matad Energy LLC is 100% owned by Petro Matad Energy Limited. Petro Matad Energy Limited holds 35,000 ordinary shares of MNT10,000 each.
Petro Matad Resources 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 15.54% of the shareholding at the end of 2025. The Company maintains a loan facility with Petrovis (main Petro Matad shareholder) for an amount of $1.5 million. Currently the loan balance is zero.
22 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 2024 and 2025, 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 2025
31 Dec 2024
$'000
$'000
Short-term employee benefits
397
711
Share based payment expense
(4)
4
393
715
(c) Other key management personnel transactions
There were no other key management personnel transactions during the year (2024: Nil).
23 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 2025
31 Dec 2024
Weighted Average Int. rate
$'000
$'000
Financial Assets
Cash and cash equivalents
0.46%
3,093
1,987
*Other financial assets
5.89%
575
968
3,668
2,955
Trade and other receivables
0%
1,706
698
5,374
3,653
Financial Liabilities
Trade and other payables
0%
2,103
961
Lease liability
116
109
2,219
1,070
Net exposure
3,155
2,583
*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 2024 and 2025 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
2025
2024
2025
2024
Mongolian Tugrug (MNT) 1
3,556.66
3,390.02
3,556.66
3,420.25
Australian Dollar (AUD) 1
1.551960
1.515831
1.52688
1.535120
Great British Pound (GBP) 1
0.759177
0.782606
0.755742
0.785108
Sensitivity Analysis
A 5% strengthening/weakening of the MNT against USD at 31 December 2024 and 2025 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 2025
31 Dec 2024
Note
$'000
$'000
Financial Assets
Trade and other receivables
8
1,706
698
Net exposure
1,706
698
Impairment Losses:
None of the Group's receivables are past due at 31 December 2025 (2024: 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 months or less
6-12 months
1-5
years
over 5 years
Total
$'000
$'000
$'000
$'000
$'000
Cash and cash equivalents
0.46%
3,093
-
-
-
3,093
Trade and other receivables
-
1,706
-
-
-
1,706
Financial Assets
5.89%
-
-
575
-
575
As at 31 December 2025
4,799
-
575
-
5,374
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
The remaining contractual maturities of the Group's and parent entity's financial liabilities are:
31 Dec 2025
31 Dec 2024
$'000
$'000
6 months or less
2,219
1,070
6-12 months
-
-
1-5 years
-
-
over 5 years
-
-
2,219
1,070
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 20(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 2025
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Financial Assets
Trade and other receivables
-
1,706
-
1,706
Total
-
1,706
-
1,706
Financial Liabilities
Trade and other payables
-
2,103
-
2,103
Lease liability
-
116
-
116
Total
-
2,219
-
2,219
Fair Value Hierarchy as at 31 December 2024
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
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
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.
24 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 17 and 18). 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.
25 Events after the reporting date
No reportable event.
26 Auditors' remuneration
The auditor of Petro Matad Limited is Hall Chadwick (WA) Pty Ltd.
31 Dec 2025
31 Dec 2024
$'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 entity in the Group
48
41
- other services in relation to the entity and any other entity in the Group
-
-
48
41
Amounts received or due and receivable by Onch Audit LLC (2024)
- an audit or review of the financial report of subsidiary entities
-
23
- other services in relation to the subsidiary entities
-
-
-
23
Amounts received or due and receivable by Reliance Securities Audit LLC (2025)
- an audit or review of the financial report of subsidiary entities
21
-
- other services in relation to the subsidiary entities
-
-
21
-
69
64
27 Other Information
Registered Office:
Victory House
Douglas
Isle of Man
IM1 1EQ
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