Final results year ended 31 Dec 2024 - Replacement

The following amendments have been made to the 'Final results for year ended 31 December 2024' announcement released on 26 June 2025 at 7:00am under RNS No 4596O.

In Note 19 of the Notes to the Consolidated Financial Statement, the minimum exploration work obligations figures were miscategorised and have been updated to reflect that by agreement with the Mongolian authorities the remaining Block XX exploration commitment of US$5.2 million can be spent within the 25 year term of the Exploitation License and so has now been correctly categorised as a commitment in 'greater than 5 years'.

Also, recognizing that the Company introduced phasing of the commitment into the contract for the recently signed Block VII, the amount included for that block is only for the first 2 years representing phase 1 of the PSC. The commitment quoted in note 2c has also been revised to reflect the correct categorisation.

All other details remain unchanged.

The full amended text is shown below.

Petro Matad Limited

("Petro Matad" or the "Company")

Final results for year ended 31 December 2024

Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil company, announces its audited final results for the year ended 31 December 2024. All monetary values are expressed in United States dollars unless otherwise stated.

2024 Operational Highlights

• The Company successfully began oil production from its Heron-1 discovery well in October 2024, which was a significant milestone after continued negotiations with Ministry of Industry and Mineral Resources (MIMR) and Mineral Resources and Petroleum Authority of Mongolia (MRPAM)
• The Heron-2 well spudded on 8 September 2024 and although drilling results were encouraging, on test the productive potential was significantly lower than rates observed at Heron-1. The well was suspended pending further analysis. The Gobi Bear-1 exploration well was also drilled with ambiguous results and a zone of interest is the subject of further study.
• In 2024, Sunsteppe Renewable Energy (SRE) increased its portfolio with the addition of two new high-graded projects. The portfolio now includes the 24MW Oyu Tolgoi (OT) mine Green Hydrogen demonstration project; the Choir 50MW Battery Energy Storage System; a 1,500MW export to China project and a 200MW Hybrid project associated with an operating power plant, all of which offer double digit rates of return.
• The Company participated in Mongolia's Exploration Licensing round and awards were still pending at year-end. Block VII, the Company's top-ranked block, was awarded to Petro Matad on 16 January 2025.

Mid-2025 operational update

• Heron-1 has continued to produce through 2025 initially on natural flow and now using artificial lift and to date the well has produced over 45,000 barrels.
• An oil sales agreement was signed with neighbouring operator PetroChina and Petro Matad received the first payment for production in June 2025. A 30% revenue withholding pending confirmation on certain potential concerns raised by PetroChina is being addressed as a priority.
• Work on Block VII is underway with encouraging results so far. Data on the seismic and drilling operations by the previous operator are being incorporated into the Company's first phase evaluation.
• The Company's renewable energy joint venture, Sunsteppe, continues to work on its four high-graded projects and is in discussion with debt providers and potential equity partners.
• Recognising an improvement in the business environment in Mongolia, Petro Matad has stepped up efforts to find farm-in partners for its upstream oil projects in order to accelerate development and production with the goal of increasing shareholder value.

2024 Financial Highlights

• During 2024 the Company executed an oversubscribed equity raise for gross proceeds of $9.4 million to fund its 2024 work programme.
• As of 31 December 2024, the Group's cash position was $3.65 million (inclusive of Financial Assets) (31 December 2023: $4.5 million).
• The Group's net loss after tax for the twelve months ended 31 December 2024 was $10.92 million (31 December 2023: loss $5.9 million).

Mike Buck, CEO of Petro Matad, said:

"After many years, 2024 finally saw Petro Matad start oil production from the Heron-1 well so becoming only the third producer in the country. While the Heron-2 well did not meet our expectations, we are working on a programme to determine the potential of the well as an oil producer or alternatively as a water injector.

Our renewables joint venture, Sunsteppe, made good progress in 2024 and the portfolio includes projects ranging from 24MW to 1,500MW. The Mongolian government has prioritised energy independence and is focused on progressing renewable energy export to China. Sunsteppe is well placed to be a serious player in this sector.

We are aware and appreciative of our shareholders' patience through the delays our projects have suffered and of their continuing support."

2024 was a transformational year for Petro Matad, with the Company becoming the third oil producer in Mongolia, with the startup of production operations in Block XX in eastern Mongolia, adding to the Company's traditional exploration activities. Delays that the Company had suffered in previous years were resolved with decisive input from the government and this heralded a push by the authorities to improve the business environment in the oil sector and the energy sector in general. The Company was navigating a number of Mongolian regulatory processes for the first time and we hope that this ground-breaking experience will ease the process for future business collaboration with the government.

During the reporting period in 2024, the Company had a busy operational year and achieved a significant milestone with first oil produced from the Heron-1 discovery well. This was achieved with the support of both local and central government agencies and Ministries in overcoming land access and various construction permitting issues. While still waiting for State Special Purpose certification of Block XX from central government, an agreement was made with Matad Soum allowing access to the area of the Heron-1 well pad and also at the planned Heron-2 and Gobi Bear-1 well locations. With these permissions in-place, the completion of Heron-1 as a production well was completed by early August. Installation of the surface facilities was threatened with further delay until the Minister of Industry and Mineral Resources and the Minister of Construction and Urban Development took action to amend relevant construction permitting regulations allowing the Heron-1 surface facilities to be installed and first oil to flow on 24 October. Initial production rates from the well were as expected at 200-250 bopd with oil being transported to PetroChina's processing facilities in Block XIX 20km to the north for storage prior to export. With production commenced, discussions with PetroChina to finalise an Oil Sales Agreement involving processing, transportation and sale finally gained some traction with the counterparty and the principles of the contract were largely agreed by year-end.

Post the reporting period, the Oil Sales Agreement was signed and in June 2025 Petro Matad received the first payment for commercial sale of its production from Block XX and whilst there are still some issues raised by the counterparty to resolve, the Company looks forward to routine monthly payments under the agreement going forward.

In parallel with completion and production operations at Heron-1, drilling activities at the Heron-2 appraisal well and the Gobi Bear-1 exploration well using funds raised in mid-2024 commenced on 8 and 21 September respectively using two rigs and drilling crews from DQE International. Heron-2 was located a little less than 1km to the south of Heron-1 with the expectation of encountering a similar reservoir thickness and quality as at Heron-1. While a thicker reservoir section was encountered up dip of the depth in Heron-1 and with oil shows observed, on test the well did not achieve commercial flow rates following stimulation and was suspended in mid-November pending evaluation of the well data. Initial assessment pointed to a reduction in reservoir permeability in the Heron-2 section being the reason for the low oil rate. This was the primary risk recognised before drilling as reservoir variability is well known and documented in the basin in neighbouring blocks. Gobi Bear-1 was located some 13km to the southwest of the Heron-1 discovery targeting the same age reservoir within a large combination structural/stratigraphic trap formed by shallowing and thinning of sediments towards the basin margin. The well encountered a good quality, thick reservoir sequence but with only patchy oil shows. However, petrophysical evaluation identified a possible zone of interest and the well was suspended in early October without testing pending geochemical analysis of well cuttings aimed to determine if moveable oil is present within the reservoir section.

It is a reflection of the professionalism and dedication of Petro Matad staff that the simultaneous operations of completing Heron-1 and installing facilities, drilling and testing Heron-2 and drilling Gobi Bear-1, were successfully completed without any environmental or safety incidents occurring and with the work done on time and within budget.

The Company's central Mongolian exploration acreage, Block V, was returned to the government at the end of July upon the expiry of the exploration term with all work commitments fulfilled and all required documentation shared with the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) and relevant Ministries. The establishment of a government working group to approve the relinquishment is the last step of the process and this was ongoing at year-end.

The Company's applications for two blocks offered in Mongolia's Exploration Licensing round were still pending at year-end with the area of one of the blocks still yet to be finalised. Block VII, the Company's top-ranked block, was awarded to Petro Matad on 16 January 2025.

Sunsteppe Renewable Energy (SRE), the Company's renewables Joint Venture was very active through the year and identified several attractive project opportunities. The two exclusively held projects high-graded in 2023 advanced in 2024 working through the permitting and detailed design stages and are continuing to progress. Numerous other initiatives were generated by the renewables team with exclusivity on two more projects being achieved in 2024/25.

2024 Review

Permitting: Block XX Exploitation Area - Land access

The land access dispute that hitherto had prevented the Company's access to the Heron development location since late 2019 was finally resolved locally with an agreement reached with the Matad Soum and land agencies. Discrete areas around the Heron-1 well site and the location of the planned Heron-2 and Gobi Bear-1 wells required to allow Petro Matad to conduct operations were approved on 27 May 2024 for a five year period. This was in parallel with the State Special Purpose land certification process that continued to be addressed by central government and was still ongoing at year-end. Certification was finally achieved post the reporting period on 5 February 2025, making Block XX the first oil exploitation area in Mongolia to have been given State Special Purpose status. The newly appointed Minister of Industry and Mineral Resources finalised the Tripartite Agreement with the Provincial Governor, the absence of which had been holding up operations and the State Special Purpose certificate was issued by the Central Land Agency. Under the Land Law, as State Special Purpose land, it will be the responsibility of the Ministry of Industry and Mineral Resources (MIMR) to secure the land access for all areas within the Block XX Exploitation Area required for operations and thus a much more streamlined process in securing land access is expected in future. This expectation was born out in the first quarter of 2025 when land access was granted without obstruction for two new areas of potential operation in Block XX.

Health Safety Security and Environment (HSSE)

The HSSE Management System (HSSE MS) of the Company is designed to adhere to best practices set by the International Association of Oil and Gas Producers (IOGP).

According to Mongolian national and international best practices, all reported HSSE incidents are thoroughly investigated, documented, and classified in accordance with IOGP guidelines. Moreover, the lessons learned from these incidents are openly shared through the management review process. The Company is pleased to report that Petro Matad, together with its sub-contractors, adhered to all Mongolian laws and national standards throughout its 2024 operations. Importantly, there were no environmental incidents, lost time incidents, or recordable incidents during the year. We are pleased to report that the Dornod Aimag Environment Committee awarded Petro Matad an overall score of 97% on the Block XX Environmental Implementation Report for operational year 2024, which is the highest score ever granted to any company operating in Dornod Province.

The Company is fully committed to environmental protection and consistently strives to implement all necessary measures to fully comply with national and international best practices, with ISO 14001 serving as the benchmark.

With Petro Matad transitioning to become a producer, it was essential that all aspects of the production operations -including personnel conduct, equipment integrity, and environmental safeguards- would be managed in strict compliance with both Mongolian national legislation and applicable international safety standards. All production and supporting equipment at the Heron-1 wellsite are maintained under a routine servicing and preventative maintenance schedule, fully in accordance with the original manufacturers' specifications. This ensures optimal functionality, prolongs equipment lifespan, and mitigates risks related to mechanical failure, emissions, and operator safety. In line with Mongolian regulatory requirements, comprehensive safety and operational signage has been installed across the production site. This includes clearly displayed hazard warnings, safe operating procedures, emergency contact information, and access restrictions, all of which promote situational awareness and guide safe conduct on-site.

Operator activities are carried out in strict accordance with Mongolia's Occupational Health and Safety (OHS) regulations. Where relevant, operational practices are also aligned with international best practices as outlined by IOGP, reinforcing our commitment to globally recognized safety benchmarks.

Operations

Block XX: The Company had contracts in place and equipment procured in readiness for when access to land was agreed and operations at Heron-1 could be commenced. With the agreement with the Matad Soum finalised on 27 May 2024 that allowed access and operations to commence at the Heron-1 wellsite and at the Heron-2 and Gobi Bear-1 well locations, the Company immediately issued mobilisation notices to DQE International and related subsidiaries for a testing rig, two drilling rigs and well testing and stimulation equipment for the planned 2024 programme. At Heron-1, completion operations started on 22 July and a reservoir stimulation programme was successfully performed which confirmed the reservoir's potential for commercial flow rates even after a shut-in period of 5 years. The production string and wellhead were installed by 15 August in readiness for the installation of the surface equipment. Being the Company's first installation of oil production facilities it became apparent when seeking construction permit approval that the existing regulations did not address oil production facilities and that they required updating. The Company was actively pursuing this process with representations to the Ministry of Construction and Urban Development (MCUD) but in parallel, with the assistance of the Minister MIMR and the Minister MCUD the regulations were updated on 30 September 2024 significantly streamlining the approvals process. This then allowed the Company to proceed with installation of production facilities which were completed on 24 October when first oil was produced from the Heron-1 well. The Company was pleased to be able to recruit production operators from the local communities and a field-based Production Operations team was established to oversee production operations and crude transportation.

Initial well production rates were in line with expectations with the well capable of producing under natural flow and with low water cut. Produced crude oil is transported to PetroChina's Block XIX TA-1 oil facility some 20km to the north for processing and storage prior to export to Chinese refineries. By year-end there were c.13,000 barrels of crude in storage awaiting export once the Oil Sales Agreement between the Company, and PetroChina was in-place.

In parallel to operations at Heron-1, the planned drilling activities at Heron-2 and Gobi Bear-1 commenced on 8 and 21 September respectively using two rigs and drilling crews from DQE International. Heron-2 was located a little less than 1km to the south of Heron-1 with the expectation of encountering a similar reservoir thickness and quality as at Heron-1. The well reached Total Depth (TD) of 2,908m in just 16 days after spud and following wireline logging, casing was run to TD and 8m of perforations were made in the casing across the identified reservoir section. The reservoir was then successfully stimulated but it became apparent during the flow-back operations that flowing rates were significantly lower than those observed in Heron-1. Subsequently swabbing operations recovered oil but at low volumes. Although a thicker reservoir section, up dip of Heron-1 was encountered with similar wireline log derived porosities it appeared that there is a marked reduction in reservoir permeability in Heron-2 and hence the low oil rate achieved. Such variation in reservoir quality is a known uncertainty in the basin and post-well studies were initiated to attempt to understand the result at Heron-2. The well was suspended on 16 November pending future operations, re-testing and/or water injectivity testing in the 2025 operational season.

Gobi Bear-1 was an exploration well located some 13km to the southwest of the Heron-1 and Gazelle-1 discoveries targeting the same age reservoir within a large combination structural/stratigraphic trap formed by shallowing and thinning of sediments towards the basin margin. The well was drilled with a smaller rig than that used at Heron-2 given the shallower targets. TD was reached at 1805m on 2 October in just 11 days and encountered a thick sandstone section within which wireline logging confirmed a total of 34m of reservoir quality sandstones within a gross interval of 70m between 1,558m and 1,628m and computed to have 13% average porosity which is consistent with the productive reservoirs in the basin. The resistivity log profile suggested the sands may contain a hydrocarbon charge. Oil shows were however only patchy across this interval casting some doubt on the presence of moveable oil in the well. The well was suspended without testing and the rig released on 5 October. Subsequent geochemistry work on drill cuttings has concluded that migrated oil is present in the well and this is a positive result although it is not definitive and work continued beyond the reporting period including reviewing the log interpretation to determine the forward programme for the well.

Block V: The exploration term for this block expired on 29 July 2024. The Company fulfilled and exceeded the contractual obligations on the block and supplied MRPAM with all relevant documentation and completed restoration works at the Velociraptor-1 well site. A working group comprising representatives of MRPAM, MIMR and other agencies was established to give the final approval for the return of the acreage to the State and their work was ongoing at year-end.

2024 Exploration Licencing Round

The Company submitted applications for two blocks offered in the MRPAM promoted exploration licensing round. Working groups, comprising experts from MRPAM and MIMR were established and the Company successfully completed negotiations on the terms of the PSC and work programmes for each block. The Company focused on blocks in Mongolia that contain extensions of basins proven productive for oil across the international border in China. The government's approval process for the award of new exploration licences continued through 2024 and was ongoing at year-end. As subsequently reported, the Company was awarded Block VII on 16 January 2025 located in southernmost Mongolia. This was the Company's top-ranked block having extensions of plays proven in adjacent Chinese basins. The initial work programme comprises field work and desk-top studies and these are ongoing in parallel with the formalities required to secure the formal government approved Exploration Licence.

Sunsteppe Renewable Energy (SRE)

The Company's renewable energy vehicle, Sunsteppe Renewable Energy (SRE), made very good progress through the year. The feasibility study for the Green Hydrogen demonstration project for Oyu Tolgoi mine was completed and submitted to Oyu Tolgoi. The Choir 50MW/150MWh battery energy storage facility in central Mongolia is also progressing.

SRE's small but active team has made a big impact in-country and with potential international partners and lending banks. With the government's new focus on renewable energy projects including large export to China opportunities, SRE's opportunity set has grown to the extent that in 2024 it added two new exclusive projects to its portfolio. One is a 1.5GW export to China project in collaboration with a major Chinese utility. The other is a 200MW hybrid wind/solar project. These sizeable projects show the potential of the renewables sector in Mongolia and with its growing connections, SRE is well-placed to take a leading role in the Mongolian renewable energy project development market.

Community Relations

Social impact

In the winter of 2023-2024, Mongolia experienced severe winter conditions, known as dzud, particularly in the eastern provinces, including Dornod province. Petro Matad financed a donation including 132 tonnes of fuel, wrapped hay, livestock cover blankets, winter working gloves and food supplies under our corporate social responsibility awareness programme. These donations were handed over to the Emergency Commission of Matad Soum who were responsible for the distribution of the goods to Matad Soum residents impacted by the dzud.

In conjunction with the 100th year anniversary of Matad Soum's establishment, celebrations were held and Petro Matad funded the construction of a basketball court and children's playground with the work being executed by a local company.

Conclusions

In the first half of 2024 the Company vigorously pursued solutions to the Block XX land access issue working closely with MRPAM, MIMR and local communities. The securing of local land approvals in 2024 enabled the Company to carry out its intended work programme through the second half of the year. The highlight of this activity was putting onstream and start up of oil production from the Heron-1 discovery well. Heron-2 delivered a result that was below expectation but work continues to determine the best use for this well. Gobi Bear-1 demonstrated once again that small rigs can be used for highly cost-effective operations on shallower wells and the ambiguous result is intriguing. The Block XX 2024 operations were completed within budget, without any HSSE incident and with excellent cooperation with the local community which is a significant achievement for the Company's Mongolian staff especially given the adversities faced in the region in previous years. With the award of Block VII in January 2025, the Company is looking forward to high grade the prospectivity of the block for an impactful exploration programme in future years.

The improvement in the business environment in Mongolia in 2024 with government taking a more proactive approach particularly in the energy sector highlighted the opportunities to the Company of looking to bring in partners to accelerate oil production operations and enhance shareholder value. This is being pursued. Meanwhile, the renewable energy possibilities of Mongolia combined with SRE's exciting start has given the Company some good options going forward.

Acknowledgements

The Company is very appreciative of the support and collaboration shown by MRPAM and MIMR through the long struggle to secure land access and the start-up of productions operations. The Company is also grateful to neighbouring operator PetroChina for the cooperation and collaboration they have shown in offering Block XX a route to commercialisation.

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 is also highly appreciated.

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2024

Consolidated

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Notes to the Consolidated Financial Statements

For the year ended 31 December 2024

1 Corporate information

Petro Matad Limited (Company) incorporated in the Isle of Man on 30 August 2007 has six wholly owned subsidiaries, which are: Capcorp Mongolia LLC, Petro Matad LLC and Petro Matad Energy LLC (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.

Petrovis Matad Inc. (Petrovis) is a major shareholder of the Company, holding approximately 17.61% of the shareholding at the year end of 2024.

2 Summary of material accounting policies

• Basis of preparation
• Level 3 inputs are unobservable inputs for the asset or liability.
• Statement of compliance
• Going concern

The Group generated a loss of $10.92 million for year 2024 (2023 Loss: $5.93 million) and experienced net cash outflows from operating activities of $9.69 million (2023 Outflow: $3.49 million). In addition, as outlined in Note 19(b) the Group is required to meet minimum exploration commitments on its Block XX and Block VII Production Sharing Contract (PSC) of approximately $5.65 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 $9.4 million in July 2024, which provided sufficient working capital for ongoing operations including the drilling of an exploration well and an appraisal well in Block XX, completion and commencement of production of the Heron-1 discovery well, and investing in renewable energy projects through its interest in Sunsteppe Renewable Energy Pte. Ltd.

The Company believes that the current cash balance is sufficient to continue operations until at least July 2026. The commencement of production operations in late 2024 has provided the Company with a revenue source which enhances the Company's ability to remain a going concern. It is also important to note that the Company can access loans up to $1.5 million from Petrovis under an existing loan agreement.

Cumulative expenditures to end 2024 in Block V exceed financial commitments by $5.1 million. The Block V PSC exploration term expired in July 2024, and the block has been fully relinquished with no outstanding commitments remaining. The Company is awaiting final approval of the relinquishment by the Mongolian Government.

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 Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 January 2020.

Standards and Interpretations in issue not yet adopted

At the date of authorisation of the financial statements, the Group has not applied the new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective. Based on a preliminary review of the standards, interpretations and amendments, the Directors do not anticipate a material change to the Group's accounting policies, however further analysis will be performed when the relevant standards are effective.

• Basis of consolidation
• 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.

2 Summary of material accounting policies (continued)

Foreign currency translation

Functional and presentation currency

Transactions and balances

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

Translation of subsidiaries' functional currency to presentation currency

• Cash and cash equivalents
• Trade and other receivables
• Plant and equipment

Plant and equipment are stated at historical cost less accumulated depreciation and any impairment in value.

Derecognition

Financial instruments

Initial recognition and measurement

Financial instruments are initially measured at fair value plus transaction costs, except where the instruments are 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 assets at fair value through profit and loss or through other comprehensive Income
• Financial Liabilities
• Financial instruments (continued)

Fair value

Derecognition

• Inventory
• Exploration and evaluation expenditure
• Exploration and evaluation assets
• Impairment of tangible and intangible assets other than goodwill

Impairment review for deferred exploration and evaluation assets is 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.
• Trade and other payables
• Provisions
• 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.

Lease payments included in the measurement of the lease liability are as follows:

• fixed lease payments less any lease incentives;
• the amount expected to be payable by the lessee under residual value guarantees;

The Group as lessor

• Contributed equity
• Revenue

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.

• Share-based payment transactions
• 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.
• Income tax

Current tax

Deferred tax

Current and deferred tax for the year

• Earnings per share
• Costs of servicing equity (other than dividends);
• Significant accounting judgments, estimates and assumptions

Share-based payments

Recovery of the exploration and evaluation assets

Going Concern

3 Operating segments

Exploration, exploitation and evaluation expenditure

Exploration, exploitation and evaluation expenditure relates to the following PSCs:

5 Income tax

Income tax recognised in the statement of profit or loss:

Tax expense/(benefit) comprises:

Petro Matad Limited and Petro Matad Energy 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

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 $1,987,000 (2023: $503,000) due to the short-term nature of the instruments.

Reconciliation from the net gain/(loss) after tax to the net cash flows from operations:

Non-cash investing and financing activities

There were no non-cash investing or financing activities undertaken in the 2024 financial year or prior year (2023: $0.00).

8 Trade and other receivables

Current

All amounts are recoverable and are not considered past due or impaired.

2024 account receivables include the oil sales revenue due from PetroChina Daqing Tamsag for the crude oil produced for the period from October to December 2024 and stored at the TA-1 central facility in Block XIX to be sold to the buyer.

9 Prepayments

The Group holds term deposits with an average weighted interest rate of 6.73%. 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.

Inventory is mainly consumables, including casing, mud and drilling materials purchased for Block XX.

12 Exploration and evaluation assets

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.

Management have reviewed for impairment indicators on Block XX and no impairment has been noted.

With the commencement of production in Block XX, the Group has commenced amortization of the asset utilizing the unit of production basis.

13 Property, plant and equipment, Right-of-Use asset and Petroleum asset

Reconciliation of carrying amounts at the beginning and end of the year:

Trade payables are non-interest bearing and are normally settled within 60 day terms.

15 Decommissioning Provision (Non-current)

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.

16 Issued capital

Ordinary Shares

• On 10 February 2023, the Company concluded a placing by issuing 94,787,994 shares at a price of GBP0.025 per share arranged through its nominated adviser, broker and joint book runner for the purposes of the Placing, Shore Capital Stockbrokers.
• On 10 February 2023, the Company concluded a placing by issuing 67,000,626 shares at a price of GBP0.025 per share arranged through its broker and joint book runner for the purposes of the Placing, Zeus Capital.
• On 10 February 2023, the Company issued 33,333,332 shares through direct subscriptions at a price of GBP0.025 per share.
• On 10 February 2023, the Company issued 20,000,000 shares to shareholders at a price of GBP0.025 per share through a retail offering on the Bookbuild platform.
• 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.

17 Reserves

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

Nature and purpose of reserves

Merger reserve

Equity benefits reserve

Foreign currency translation reserve

18 Share based payments

• Long Term Equity Incentive Plan (Plan or Group's Plan)
• 25% vest on the first production of oil on a commercial scale, estimated by management as to be achieved prior to 30 June 2025; and
• Option pricing model

Following table summarizes Options granted during 2023, along with relevant details in relation to the grant.

Options granted above are exercisable as follows:

• 33% one year after grant date
• 33% two years after grant date
• 34% three years after grant date

No Options have been issued during 2024.

Movement in Share Options

• Share Options Contractual Life
• Conditional Share Awards pricing model

No awards were granted in 2023 and 2024.

Movement in Conditional Share Awards

• Conditional Share Awards Contractual Life
• Summary of Share Based Payments

A reconciliation of all share-based payments made during the year is as follows:

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.

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 VII block.

The amounts set out below do not include general and administrative expenses.

Contingencies

On 5 August 2016, Shell through its Affiliate company announced it would be withdrawing from Blocks IV and V in West/Central Mongolia. As part of the negotiations leading to formal Mongolian Government approval of the reassignment of interest from Shell's Affiliate to the Company's Affiliate, Shell agreed to a payment of $5 million to be remitted to the Company's Affiliate upon such government approval being received. A condition to the payment by Shell is that the proceeds are required to be repaid to Shell by the Company in the event a farmout is concluded in future prior to the development of either Block IV or V. Block IV has since been relinquished by the Company in its entirety and Block V is in process of formal processes for final relinquishment. As a result, the conditional payment is no longer applicable. The $5 million payment from Shell was received on 1 February 2017.

20 Related party disclosures

The immediate parent and ultimate controlling party of the Group is Petro Matad Limited.

Equity Interest

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.

Petro Matad Energy Limited is 100% owned by Petro Matad Limited. Petro Matad Limited holds 50,000 Ordinary shares of $1 each.

Petrovis Matad Inc. (Petrovis) is a major shareholder of the Company, holding approximately 17.61% of the shareholding at year end of 2024.

21 Key management personnel

Details of Directors

Directors

Enkhmaa Davaanyam Non-Executive Chairperson

Timothy Paul Bushell Non-Executive Director

Michael James Buck Chief Executive Officer

Shinezaya Batbold Non-Executive Director

Compensation of Directors

Consolidated

Other key management personnel transactions

There were no other key management personnel transactions during the year (2023: Nil).

22 Financial risk management objectives and policies

The main purpose of these financial instruments is to raise capital for the Group's operations.

Risk Exposures and Responses

Interest rate risk

Sensitivity Analysis

Price risk

Credit risk

There are no significant concentrations of credit risk within the Group.

Maximum exposure to credit risk at reporting date:

Impairment Losses:

None of the Group's receivables are past due at 31 December 2024 (2023: Nil)

Liquidity risk

The remaining contractual maturities of the Group's and parent entity's financial liabilities are:

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 19(b).

Fair Value of Financial Assets and Liabilities

Fair Value Hierarchy as at 31 December 2024

23 Capital management

The Group is not subject to externally imposed capital requirements.

24 Events after the reporting date

Block XX Special Purpose Area status obtained in February 2025.

On 16 January 2025, the Company signed a PSC for a new petroleum exploration Borzon Block VII block with the Government of Mongolia.

On 14 April 2025, Petro Matad Energy LLC was incorporated in Mongolia as a wholly owned subsidiary of Petro Matad Energy Limited as the local operator company of Borzon Block VII.

On 28 April 2025, Petro Matad LLC and PetroChina Daqing Tamsag, the operator of neighbouring Block XIX, signed the Oil Sales Agreement covering storage, processing, transport and export of Block XX crude oil production.

25 Auditors' remuneration

The auditor of Petro Matad Limited is Hall Chadwick (WA) Pty Ltd.

Amounts received or due and receivable by Hall Chadwick (WA) Pty Ltd:

Amounts received or due and receivable by Deloitte Onch Audit LLC for:

Amounts received or due and receivable by Deloitte Infinity Assurance LLP for:

26 Other Information

Registered Office:

Victory House

Douglas

Isle of Man

IM1 1EQ