Half-year Results

LONDON, 19 September 2024: Petro Matad Limited, the AIM quoted Mongolian oil company, announces its unaudited interim results for the six months ended 30 June 2024.

Financial Summary 1H 2024

The Group posted a loss of USD 2.56 USD million for the 6-month period ended 30 June 2024, which compares to a loss of USD 1.90 million for the comparable period in 2023. The Company's cash balance at 30 June 2024 was USD 1.93 million (USD 0.77 million in cash and USD 1.16 million in Financial Assets), which compares to a cash balance of USD 8.39 million (USD 0.82 million in cash and USD 7.57 million in Financial Assets) on 30 June 2023.

As previously announced, a successful fundraise totalling USD 9.4 million of gross proceeds was completed in July 2024 to fund commencement of production and development of the Heron oil discovery in Block XX and to continue to develop renewable energy projects through the SunSteppe Renewable Energy (SRE) joint venture.

Operational Summary 1H 2024 and look ahead

On the Company's Block XX in eastern Mongolia where the Heron oil discovery had been ready for the first phase of development for some time, the land access issue continued to delay activities through the first half of 2024. The hold up was due to delay in the government completing the registration of Block XX as State Special Purpose Land even though this had been approved by the cabinet in July 2023. With the matter delayed at provincial level, Petro Matad was able to secure land use agreement at the district level in late May 2024 that allowed operational activity to go ahead in the second half of the year.

Following the reporting period, the Company has announced the downhole completion of the Heron-1 discovery well, the commencement of drilling of the Heron-2 development well and the plans to spud the Gobi Bear-1 exploration well. Operational activities are focussed on starting production from the discovery and securing a route to market for the oil.

On the Block V Production Sharing Contract (PSC) in central Mongolia, with the expiration of the exploration period due in late July 2024, the Company undertook all the necessary work to hand back the acreage to the government in good order. This work was completed ahead of the expiration of the period on 28 July 2024.

MRPAM's Exploration Tender Round offering new PSC areas continued through the first half of the year although progress was held up by the late June 2024 parliamentary elections. As previously reported, the Company has been selected as the preferred contractor for the two blocks for which it submitted applications. Following the parliamentary elections the Company has been advised that the process to award the new PSCs is now progressing.

The Company's renewable energy initiative continued to make good progress in the first half of 2024. The SunSteppe Renewable Energy (SRE) joint venture had high graded two projects for development. The first project involves the provision of Green Hydrogen to Mongolia's major Oyu Tolgoi copper and gold mine in which Rio Tinto is the major investor. An exclusive Memorandum of Understanding was signed with Oyu Tolgoi and the Japanese Overseas Environmental Cooperation Centre (OECC) to develop the project and supply Green Hydrogen to be used to provide heat to facilities at the mine. Through the involvement in the venture of OECC, the partnership was able to secure some Japanese Government grant funding and an application for further grant funding is expected to be made in due course.

SRE's second high graded project is the Choir 50MW Battery Energy Storage System (BESS). The government has identified the need for a substantial BESS at Choir to help stabilise the grid and reduce high-cost import of power from China and Russia at peak hours and the economically wasteful export of power during off peak periods. SRE secured approval of the feasibility study from the Ministry of Energy for a 50MW BESS project at Choir and began preparation of the application for the licence to construct which continued beyond the end of the reporting period.

In parallel with bringing its two high graded projects to construction readiness expeditiously, SRE is reviewing a number of other renewable energy opportunities in Mongolia in order to add the most attractive to its high graded portfolio.

Mike Buck, CEO of Petro Matad, said:

"The progress made on the land issue in 1H 2024 has been a long time coming but with permits now in hand, our successful fund raise in July has allowed operational activity to commence in earnest with downhole completion of Heron-1, spud of Heron-2, plans to spud Gobi Bear-1 and preparations for production start up.

I would like to thank the entire Petro Matad team for their relentless work, in often frustrating conditions, so far this year and we look forward to updating shareholders on the progress and conclusion of several workstreams in the months to come."

STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 30 JUNE 2024

Consolidated

CORPORATE INFORMATION

The financial report covers the consolidated entity of Petro Matad Limited and its controlled entities.

Petro Matad Limited (Company) incorporated in the Isle of Man on 30 August 2007 has five wholly owned subsidiaries, which are: Capcorp Mongolia LLC and Petro Matad LLC (both incorporated in Mongolia), Central Asian Petroleum Corporation Limited (Capcorp) and Petromatad Invest Limited (both incorporated in the Cayman Islands), and Petro Matad Energy Limited (incorporated in Isle of Man). Petro Matad Limited owns 50% of Sunsteppe Renewable Energy Pte. Ltd. (formerly known as Petro Matad Singapore Pte. Ltd.), which is incorporated in Singapore, which is owned jointly together with Sunsteppe Energy LLC to pursue renewables energy projects. The Company and its subsidiaries are collectively referred to as the "Group". The Group's principal activity in the course of the financial year consisted of oil exploration and development and investment in renewable projects in Mongolia.

Petro Matad Limited trades on the Alternative Investment Market (AIM), which is a sub-market of the London Stock Exchange, under the symbol MATD. Its major shareholder is Petrovis Matad Inc.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half-year financial report should be read in conjunction with the annual Financial Report of Petro Matad Limited as at 31 December 2023. The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2023.

It is also recommended that the half-year financial report is considered together with any public announcements made by Petro Matad Limited and its controlled entities during the half-year ended 30 June 2024.

Basis of Preparation

The half-year consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ('IASB'). The half-year financial report has been prepared on a historical cost basis, except where stated.

The financial report is presented in US dollars and all values are rounded to the nearest thousand dollars ($'000).

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group as at 31 December each year.

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

CONTRIBUTED EQUITY

CONSOLIDATED

Ordinary shares

Full paid ordinary shares carry one vote per share and carry the right to dividends.

RESERVES

A detailed breakdown of the reserves of the Group is as follows:

EARNINGS/(LOSS) PER SHARE

The following reflects the income and share data used in the total operations basic and diluted earnings/(loss) per share computations:

CONSOLIDATED

Basic earnings/(loss) per share

The profit/(loss) and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:

Diluted earnings/(loss) per share

The profit/(loss) and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:

Share Options and Conditional Share Awards could potentially dilute basic loss per share in the future, however they have been excluded from the calculation of diluted loss per share because they are anti-dilutive for both years presented.

EVENTS AFTER THE REPORTING DATE

On 1 July 2024, the Company concluded a placing by issuing 189,311,666 shares at a price of GBP0.020 per share arranged through its nominated adviser, broker and joint book runner for the purposes of the Placing, Shore Capital Stockbrokers.

On 1 July 2024, the Company concluded a placing by issuing 117,381,250 shares at a price of GBP0.020 per share arranged through its broker and joint book runner for the purposes of the Placing, Zeus Capital.

On 1 July 2024, the Company issued 43,307,084 shares through direct subscriptions at a price of GBP0.020 per share.

On 1 July 2024, the Company issued 20,000,000 shares to shareholders at a price of GBP0.020 per share through a retail offering.