Petro Matad Limited

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

Operational Update

LONDON, 29 May 2024: Petro Matad Limited, the AIM quoted Mongolian oil company provides the following operational update.

Key Company Updates

·    The Company has received the remaining approvals necessary from Matad District to allow the 2024 operational programme to commence. Land use certificates have been issued for the three areas of operation selected by the Company.

·    Discussions on timing of mobilisation to re-enter and complete the Heron 1 well for production are ongoing with service provider DQE.

·    Petro Matad continues to push the central government to complete the certification process and confirm Block XX as State Special Purpose land to streamline the permitting process in future years. MRPAM has written to the Provincial authorities telling them to revise the coordinates of the area which overlaps with Petro Matad's Exploitation Licence.

·    The Company's renewable energy joint venture is progressing its two high-graded projects and has a number of new opportunities including a potential export to China initiative.

Operational Update

Block XX land access and Heron 1 completion

Following the approval of land access from the Matad Citizens' Representatives Committee in late February, the Company has now secured the Matad Governor's follow up resolution and the land use agreement for the three areas chosen for operations in 2024. The land access granted is valid for five years, and this local level approval allows work to go ahead whilst the central government's process to certify the Block XX Exploitation Area as State Special Purpose Land is completed.

As part of the local level approval, with the support of the Land Agency and industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), Petro Matad paid compensation to the herders whose registered pastures will be impacted by the Block XX Exploitation Area.

With the local land use approval in place, Petro Matad is in discussion with service provider DQE to agree the timing of mobilisation of the completion crew to Heron 1. If possible, it is hoped to have the crew at site before Mongolia's parliamentary elections on 28^th June, although campaigning tends to have a disruptive influence on logistics in the country. If not possible before, mobilisation shortly after the election will be targeted.

Discussions with PetroChina on oil processing, export and sale are waiting on feedback promised at a constructive meeting held in early May. Even if the oil offtake is not finalised, Petro Matad will prioritise getting the Heron 1 well ready to produce as soon as possible since we are aware that DQE expects to be busy with PetroChina and other operators from early Q3 2024.

Certification of Block XX as State Special Purpose Land

This process is moving slowly and the central government's focus on the parliamentary elections is a further hinderance. MRPAM has written to the Provincial authorities instructing them to revise the coordinates of their overlapping area which impinges on the Block XX Exploitation Area. Meanwhile, the Ministry for Economic Development has advised that its preparation for a submission to Cabinet to attempt to remove the obstacles to completing the certification process is progressing. The Company does not expect substantive progress until after the June elections but will continue to push for progress before the elections. With the District level approvals in hand, work can now be done, but special purpose certification represents the long-term solution and is still required to mitigate any delays to operational activities that may arise in future years.

Renewable Energy Projects

SunSteppe Renewable Energy (SRE)'s project to provide green hydrogen to Mongolia's major Oyu Tolgoi copper and gold mine is progressing. Wood Group is undertaking the detailed technical and commercial evaluation which is scheduled to be completed in Q3 2024 and multilateral and commercial banks are showing interest in this project. Meanwhile, on the Choir 50MW Battery Energy Storage System project, environmental studies have begun as part of the preparations to submit the application for the licence to construct.

A third project involving renewable electricity export from Mongolia to China is under discussion following the signing of an exclusive cooperation agreement with a major, state-owned Chinese utility. The agreement envisages a 1.5GW project.

SRE continues to pursue a number of other initiatives.

Mike Buck, CEO of Petro Matad, said:

"We are delighted to have finally secured land access on Block XX and are looking forward to getting back on to the Heron 1 site and completing the well for production. The special purpose certification process remains a frustration but at least now we can work in parallel.

SRE is making good progress on its two high-graded projects and the power export initiative offers exciting potential. It is very pleasing to see that numerous new opportunities are being generated by the team."

Further operational updates will be provided in due course.

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About Petro Matad

Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds 100% working interest and the operatorship of two Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 214 square kilometres in the far eastern part of the country and Block V has an area of 7,937 square kilometres in the central western part of the country.

Petro Matad Limited is incorporated in the Isle of Man under company number 1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle of Man, IM1 1EQ.