Matra Regulatory News (MTA)

9 August 2012

Matra Petroleum PLC

("Matra" or the "Company")

Half Year Results

Matra Petroleum PLC, the independent oil and gas exploration and production company with operations in Russia, today announces its results for the six-month period ending 30 June 2012.

Main results of Arkhangelovskoe LLC activities on the Sokolovskoe field in the first half of 2012.

In April 2012 having completed the purchase of production equipment, production started at the well A-13 on Sokolovskoe field, with an average daily rate of 26 bopd. In May 2012, when an electric submersible pump ("ESP") was installed, the production rate increased up to 70 bopd.

Total production in the first half of 2012 was 2,892 bbl of oil (30 June 2011: 9,730 bbl of oil).

Revenue for the same period was€68,423 (30 June 2011: €288,410).

Planned activities for Arkhangelovskoe LLC in the second half of 2012:

3D seismic survey over 60 km², 2D seismic survey over 100 linear kilometers, with a total cost of €1.3 million including supervising and VAT. Field operations will be performed by "Orenburgskaya geofizicheskaya expediciya" OJSC.

In the second half of 2012, we expect to produce approximately 9,000 bbl of oil.

Highlights

New strategy in 2012

·      The implementation of an acquisition led growth strategy with a focus on Emerging Markets and CIS

·      The development of a balanced portfolio with production, appraisal and exploration potential

·      Focus on politically and fiscally stable countries favorable for investors

·      Build operational hubs and seek to develop license portfolios around these

Operational

·      2D & 3D seismic survey commissioned on the Sokolovskoe oil field

Financial

·      €5.7 million (£4.6 million) raised in private placing  (11 May 2012)

·      Cash or cash equivalents of €5.8 million as at 30 June 2012

Maxim Barskiy, CEO, commented:

"I am very positive about Matra's outlook as we begin to execute our strategy of creating growth through value accretive acquisitions. This year we have undertaken financial due-diligence procedures and evaluation on an E&P business in South America and a large exploration opportunity with proved deposits located in a Special Tax Regime region of Russia and we are now in the negotiations phase with the owners of the assets. We have recently begun due-diligence review for a few prospective opportunities in Central Asia and we hope to be able to provide a progress update in the coming months."

For further information, please contact:

Matra Petroleum plc c/o Pelham Bell Pottinger

Henry Lerwill                                        0207 861 3169

Canaccord Genuity Limited

Rob Collins

Henry Fitzgerald-O'Connor                   0207 523 8000

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

Dear Shareholder,

The first half of 2012 was a period of renewal for Matra as we welcomed Maxim Barskiy as a cornerstone investor and CEO. Maxim brings with him a wealth of experience within the industry through his roles at TNK-BP and perhaps more relevantly to Matra, his time with West Siberian Resources when the Company saw exceptional growth culminating in a merger with Alliance Oil.

The change of management was also an important catalyst for the strategic review instigated by Matra as to how best to grow the Company for shareholders. It was approved that Maxim, along with the support and input of the board, would devise a new strategy for the Company. 

Maxim has since laid out a clear vision to grow Matra into a mid-cap oil and gas company through the value accretive acquisition of assets that offer production, appraisal or exploration opportunities. This exciting new strategy will see Matra expanding its geographical focus to include emerging markets, in particular Latin America, Central Asia, and Special Tax Regime Regions of Russia.

To assist with the implementation of this new strategy the Company hasstrengthened the Board and begun broadening the operational and corporate team to allow us to take on the larger projects. So far, we have been delighted to welcome Vladimir Lenski as Managing Director and Ekaterina Sapozhnikova as Chief Financial Officer.

While we look for new opportunities we are also actively assessing the prospects for our current asset, the Sokolovskoe oil field. In July 2012 the Company commissioned a seismic survey including 100 km of 2D seismic and 60 sq. km of 3D seismic. We expect the final results from the survey in Q1 2013 which will allow us to fully understand the potential of the field and to assess the options for maximising the value of this asset.

As a result of the successful equity placing in April 2012 which raised €5.7 million, the Company's cash position remains strong and Matra continues to operate without any debt. The board is considering a number of options to fund the stated strategy.

We hope to be able to announce the first development in our new strategy in the second half of 2012, and in the meantime continue to assess the potential of our legacy asset.

Finally, I would like to thank the whole team for their hard work at this exciting time for Matra.

Sir Michael Jenkins

Chairman

8 August 2012

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

INDEPENDENT REVIEW REPORT TO MATRA PETROLEUM PLC

Introduction

We have been engaged by the company to review the financial statements in the half-yearly financial report for the six months ended 30 June 2012 which comprise the consolidated income statement, the consolidated statement of comprehensive loss, the consolidated statement of changes in equity, the consolidated statement of financial position, the consolidated statement of cash flows and the related explanatory notes that have been reviewed.  

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the half-yearly  financial statements.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors.  The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Our responsibility

Our responsibility is to express to the company a conclusion on the set of financial statements in the half-yearly financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the  financial statements in the half-yearly financial report for the six months ended 30 June 2012 arenot prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

BDO LLP

Chartered Accountants and Registered Auditors

Location

United Kingdom

8 August 2012

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

CONSOLIDATED INCOME STATEMENT

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The financial statements were approved and authorised for issue by the Board on 8 August 2012 and signed on their behalf by

Chief Executive Officer

Maxim Barskiy

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

CONSOLIDATED STATEMENT OF CASH FLOWS

The Statements of Cash Flows of the Group for the period ended 30 June 2011 and the year ended 31 December 2011 have been reclassified to correct the finance income, finance costs and cost related to sale of test production in order to improve the presentation of the Statements of Cash Flows.

The reclassification had no impact on the Group's net increase/(decrease) in cash and cash equivalents for the periods then ended.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. Basis of Preparation

The consolidated interim financial statements of Matra Petroleum plc (the "Company") for the six months ended 30 June 2012 comprise the Company and its subsidiaries (together referred to as the 'Group'). The corresponding amounts are for the year ended 31 December 2011 and the six month period ended 30 June 2011.

These consolidated interim financial statements have been prepared in accordance with the rules of the London Stock Exchange for companies trading securities on Alternative Investment Market and on a basis consistent with the accounting policies and methods of computation as published by the Group in its annual report for the year ended 31 December 2011, which is available on the Company's website. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2011 Annual Report.

The financial information for the half years ended 30 June 2012 and 30 June 2011 is unaudited, but were the subject of an independent review carried out by the Company's auditors, BDO LLP,  and do not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006.

The annual financial statements of Matra Petroleum Plc `are prepared in accordance with Financial Reporting Standards (IFRS) as adopted by the European Union. The comparative financial information for the year ended 31 December 2011 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2011 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2011 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated financial statements.

The same accounting policies, presentation and methods of computation are followed in these financial statements as were applied in the Group's latest annual audited financial statements except that in the current financial year, the Group has adopted a number of revised Standards and Interpretations. However, none of these has had a material impact on the Group's reporting.  In addition, the IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report

2. Increase in Share Capital

During the year the Company placed 575 million new shares with Mr Maxim Barskiy and 6.2 million new shares following the exercise of the options held by the Directors with other subscribers. Details of the share issues are summarised below:

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

3.             Loss Per Share

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of Ordinary Shares outstanding during the period.

Due to the losses incurred during the period a diluted loss per share has not been calculated as this would serve to reduce the basic loss per share.

At the reporting date there were 67,922,907 (30 June 2011: 52,400,000; 31 December 2011: 59,650,000) of share incentives that could potentially dilute basic earnings per share in the future.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

4.             Other Administration Expenditure

Group's administration expenditure for the 6 months 2012 increased by €999,663 (6 months 2011: €611,882). An increase in staff costs was due to termination payment in amount of €399,116 to Peter Hind, Managing Director.

In addition to the amounts included in the table above N Hodgson was allowed to retain and exercise his 6,000,000 share options with an exercise price of £0.05 and 8,000,000 share options with an exercise price of £0.0365 until 31 December 2012 in recognition of his past service as an executive director of the Company.

An increase in legal & professional costs was largely due to the legal and professional fees related to an analysis of new investment opportunities and potential acquisition targets and also termination and appointment of directors. An increase in travel costs related to more intensive international travelling as a result of the Group's new expansion policy.

5.     Interim Report

Copies of this interim report for the six months ended 30 June 2012 will be available from the offices

of Matra Petroleum plc, 101 Finsbury Pavement, London, EC2A 1RS, United Kingdom and on the company's website www.matrapetroleum.com.