Member Info for Dan_LSE

"A reliable supply of cheap and green energy. A minimum of more than 100 GW is important."

Our biggest project is 3 GW (MoU with China’s SPIC for 1.5GW firm plus 1.5GW contingent projects). That is a massive increase that we could tap into with ACWA money... They have already done it in Uzbekistan - 21:20

https://www.youtube.com/watch?v=UpDbDFuN9Q4

Https://energy.gov.mn/post/175074

CONSTRUCTION OF SOLAR POWER PLANTS AND BATTERY STORAGE FACILITIES IN THE FIVE PROVINCES WILL BEGIN IN JULY

Projects involving solar power plants and battery storage systems have been launched at five locations, and competitive tenders have been announced by the Ministry of Energy and applications have begun to be received from industry units for expressions of interest. This is the first time that the Government has announced a competitive audition in the renewable energy sector as part of the support of national companies and industrial units.

The construction of new resources in Bulgan, Khentiy, Oyarkhangai, Govsumber and Dundgov regions is being carried out by the Ministry of Agriculture. The progress was presented to the Prime Minister today. On the part of the Prime Minister, he was instructed to ensure that the development is put into operation within the planned timeframe.

Auditions will be conducted in an open, transparent, and digital manner. More information on this is posted on the website of the Ministry of Energy. Registration is scheduled to close on June 15 and work is scheduled to begin by signing a contract with a qualified contractor by July 1.

AGM questions 2/2

Renewables part

Could you confirm the composition of the consortium Sunsteppe is in as part of a bid for the recently announced windfarm auction?

Could you please provide more detail on the Oyu Tolgoi green hydrogen project - what has been the process so far, what are the causes for delays, which decisions are we dependent on and waiting for?

It would be beneficial to cover the economics of each type of renewables project, explaining the stages of these projects, to which stage we want to get each of them, whether do we exit at one point or continue to operation and maintenance, who pays which part of costs, if Sunsteppe JV parent company covers 50% of costs, or if arrangements are different.

Other

As investors, we are once again asking for improved engagement with investors or potential investors via social media. There are many many opportunities for engaging posts which investors collate through own search but they never make it to the company's X account. There have been many meetings with government officials which are publicised on their Facebook pages, Capital Markets Mongolia events where Zula attends and speaks, EBRD/ADB posts focused on developing Mongolia, international government meetings focused on oil and renewables, government announcement prioritising renewables projects, auctions launched… but none of it is used to help position Petro Matad and Sunsteppe as THE companies being in the middle of it.

@investor33 I agree about the technical subject difficulty, although I do mean 30% improvement in flow rate would be "good enough" for us given the cost, a.i. from 150 bopd to 195 bopd. Given the cost, that is already paid for quickly and beneficial enough to turn the average of above average Mongolian wells into all being above average.

Btw here are some of the AGM questions I sent. 1/2

Oil part

Please clarify the feasibility and availability of fishbone completions and radial/je drilling to improve well recoveries and flow rates. Are contractors actually available for such work? What is the reasoning for it not being already implemented? Is there a concrete plan to implement those?

Due to the published low cost ($175k per well) of the radial drilling, would it be something that can be used on wells which only have oil shows but currently no commercial flow, since the expense is low to the potential of encountering oil-bearing zones horizontally from the most promising pay zones could be worth the effort, or is it only suitable for proven producing wells?

Given the almost hardly believable ratio of investment to potential benefit of these drilling improvements, did Petro China implemented either fishbone completions or radial drilling? If yes, do we know what was the result? If not, why would they not implement it?

How does the economics of oil sales change when oil refinery is put into operation?

Would it be possible to publish a sensitivity chart calculating net oil revenue based on various Brent prices? We understand that the sale price is nearly pegged to Brent minus a few dollars, however it is difficult to understand how government royalties and other elements influence the net back. It may help resolve repetitive questions from investors.

Will de-waxing Heron-2 result in temporary few-day shutdown, or is it a process that can be completed during standard production?

Could you please provide more detail on the stages of farm-out process, so investors understand why it cannot be something to be completed in 2 months, but a process that can take much longer? What are the tedious bits, why can it get drawn out, but still continue in line with expectations?

Could you please update us on what work has been completed regarding Block VII studies, and what kind of work is ahead of us?

@TenBagTag "As per the company presentation: those 1000% to 3000% uplifts in bopd are achievable"

Correction - the presentation states: "Global deployment in lower permeability reservoirs can improve flow rates by up to 1000% and ultimate well recoveries by 20-30%"

I would not recommend being fixated to the highest number. Given the cost, if real, a 30% improvement per well is already interesting for us, and more realistic. If we ever got a 100% increase it would already be a massive success that I would not count on.

The source articles for the 3000% uplift is here: https://www.offshore-mag.com/drilling-completion/article/14038989/multilateral-stimulation-techniques-improve-reservoir-penetration

The first pilot installation in a horizontal well took place in 2014 in the Austin Chalk carbonate reservoir onshore Texas(...) In this area the Austin Chalk is a tight limestone formation with porosity of 5% and 0.5 mD permeability(...) The production results confirmed significant stimulation of the well through use of the MJST, with a Productivity Index increase recorded of 30 times previous values. At the time, creating 60 laterals in less than five hours was understood to have been a world record(...)Since then, the MJST system has been deployed in multiple wells around the world, including offshore deployments in the North Sea and in the Middle East. On average, the technology has doubled production rates.

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The chalk carbonate geology in Texas is different to Block XX, therefore I would not draw exact parallels there.

The Austin Chalk field in Texas and Petro Matad’s Block XX reservoir in Mongolia are made up of very different types of rock, so results from Texas need to be treated with caution when thinking about Mongolia. In Texas, the Austin Chalk is a soft limestone that contains oil in tiny pores but does not let oil flow easily on its own. What makes it productive is a natural network of cracks running through the rock. The Fishbone technology used there worked extremely well because it used acid to dissolve the limestone and connect the well directly into this existing crack system. This dramatically improved oil flow, which is why the well’s productivity increased so sharply. Block XX in Mongolia is different. The oil sits in sandstone layers, not limestone. Some of these sand layers are good enough to produce a few hundred barrels of oil per day, but others are much tighter and do not flow well without help. Importantly, there is no widespread natural crack network to assist oil flow. As a result, production in Block XX depends mainly on how good the sand itself is and how effectively it is stimulated. This means that Fishbone technology could still add value in Block XX, but it would work in a different way. Instead of dissolving soft rock and connecting into natural fractures (as in Texas), it would need to mechanically create new flow paths within selected sand layers.

Https://capitalmarkets.mn/insight/176

🌱 State Bank JSC's US$100M Tap Issuance: Three Signals for Mongolia's International Funding Architecture

State Bank JSC, the state-owned Mongolian commercial bank, has tapped its existing US$200 million 8.9% Senior Notes due 2028 with an additional US$100 million tranche, pricing the new notes at a yield of 8.5%. The fungible tap consolidates the issue into a single US$300 million series, backed by Letters of Support from both the Bank of Mongolia and the Ministry of Finance, with proceeds earmarked for eligible green projects under the Issuer's S&P Global-reviewed Sustainability Financing Framework.

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Although it is aimed at things like loans to individuals, mortgages, hosing development, there is also space for electricity generation projects

https://www.statebank.mn/back/storage/files/%D0%A2%D0%BE%D0%B3%D1%82%D0%B2%D0%BE%D1%80%D1%82%D0%BE%D0%B9%20%D1%85%D3%A9%D0%B3%D0%B6%D0%B8%D0%BB/State%20Bank_SPO_Final%20Report_Web%202025.02.17.pdf

Page 2 & 7

The bank expects to use some 80% of net proceeds to finance new projects, while the balance will be directed to refinance projects.

Renewable Energy - Medium Green

Generation of electricity from wind, solar photovoltaic (PV), hydropower facilities, geothermal or biomass/biogas power

Development or improvement of transmission systems

Development or manufacture of renewable energy technologies

Marginally useful for us... But still interesting, as it may improve institutional investment opinion around Mongolia.

Golomt Bank Successfully Completes New International Bond Issuance with US$500 Million

Mongolia's capital markets just reached a new milestone and this time, it came from the private sector.

Golomt Bank has successfully priced a USD 500 million, three-year international bond at a coupon of 7.95%, becoming the largest standalone bond ever issued by a Mongolian financial institution. The transaction didn't just set records on size — it achieved the lowest USD borrowing cost ever secured by a Mongolian private-sector entity, reduced the bank's financing costs by approximately 3.875 percentage points versus its 2024 debut issuance, and attracted a USD 2.1 billion order book — more than seven times the original target size. For investors watching Mongolia's integration into global capital markets, this transaction is more than a corporate financing event. It is evidence that Mongolia now operates a functioning dual-track issuance profile: sovereign macro credit at the country level, and institutional-grade private credit at the corporate level...

@LimitedFunds

Probably not unreasonable. I would expect an Operational Update just before the AGM and then we will know what is up.

If no farm-out --> you may be more in the red than now but will cut the losses without waiting for what comes next, and you may not see the result of currently planned works that should be independent of farmout

If there is farm out announced --> you may be in the green assuming it is a big positive figure and can exit happy

If it is something in-between --> you may just cut the waiting time and focus on something else

Probably impossible to say what is the right timeline, my guess is you know what the timeline should be right on the day of the AGM.

I understand the points, but without knowing the wording of 2025 it is not certain. It would be enough to have in the contract that the parties will review the contract annually but in the absence of withdrawal of any party the contract continues with agreed terms.

But I agree with you that this is PC we can’t expect it being done the easy way. I have sent the question to PM and will post here once response is received.

@Unnd

"Without the Agreement MATD cannot invoice and be paid for 2026 production."

How do you know? Could it not simply work in a way that old terms apply unless new terms are agreed?

1/2

Documented Field Results: Fishbone (Multilateral Needle) Completions

Fishbone completions (also called Multilateral Stimulation Technology) are a newer technique (introduced ~2010s) and have been tested in tight carbonate and sandstone reservoirs worldwide, including onshore Middle East and North America. They involve integrating many short “needle” laterals into the production liner to massively increase near-wellbore contact. Key findings from recent operator-led trials:

ADNOC Onshore “Field Q” (Abu Dhabi, UAE) – In a 2019 pilot targeting a tight, thin (~90 ft), low-permeability (1–3 mD) carbonate reservoir, ADNOC deployed 160 jetting needles (≈40 ft each) in a horizontal well3. The fishbone-stimulated test well achieved an initial rate of ~1,600 BOPD with healthy flowing pressure, compared to ~400–500 BOPD in nearby conventionally completed wells – a ~3× increase3. The added reservoir contact connected seven previously isolated sub-layers, reducing drawdown per layer and improving vertical sweep3. Encouraged by stable results, ADNOC expanded to a 10-well fishbone pilot program3. They reported that fishbone completions might obviate drilling extra wells for each sub-zone (lowering development cost) and mitigate water/gas breakthrough risk by keeping laterals short and contained within target layers3. Key outcomes: ~200–300% production uplift sustained through initial months; effective bypass of near-wellbore damage and improved pay connectivity, implying potential for higher recovery if stable over field life3.

Austin Chalk Pilot (Onshore Texas, USA) – The first fishbones pilot (2014) in a tight chalk/limestone reservoir (∼0.5 mD, ~5% porosity) demonstrated extreme PI increases. In a horizontal well in the Austin Chalk, 60 acid-jetting needles were simultaneously jetted, yielding a ~30-fold (!) increase in productivity index vs. pre-stimulation7. This massive stimulation (essentially a 3,000% PI jump) confirmed fishbone viability in ultra-low-perm carbonate and set a record for lateral count installed in hours7. Follow-up fishbone installations in similar chalk and tight carbonates have generally produced 2–3× increases in flow rates on average7.

2/2

Shell/Bapetco Western Desert (Egypt) – Shell piloted fishbone technology in 2018 on an onshore tight limestone (Western Desert) field, after successful experience in Oman and globally6. The fishbone-equipped well (horizontal, jetting with acid) exceeded expectations, producing ~150% of the forecasted rate (i.e. roughly 1.5× higher than a comparable offset) with virtually zero water cut, whereas nearby offsets had ~40–50% water cut6. This indicated improved reservoir sweep and selective stimulation in oil zones with minimal water influx. Key outcomes: ~50% higher oil rate than planned, drier oil, and demonstration that fishbone technology can be deployed in low-perm sandstone or limestone reservoirs to boost productivity more cost-effectively than large hydraulic fractures6.

Field experience suggests fishbone completions can double or triple well productivity in many tight reservoirs. The ADNOC pilot saw ~3× higher initial rates3, and an average outcome across global fishbone installations has been roughly ~2× production rate increases relative to conventional completions7. Notably, fishbone techniques allow adding hundreds of feet of reservoir contact in hours with minimal environmental footprint, and can sometimes avoid the need for multi-stage fracs. By contacting more of the reservoir, fishbone completions are expected to raise recovery factors; however, because this technology is relatively new, the long-term incremental recovery is still being monitored. In one modeling study, a fishbone-type multilateral well with four branch laterals was predicted to produce ~393% more oil than a single horizontal well (with only ~130% additional cost)6 – highlighting the efficiency of reservoir contact vs cost. Field pilots like ADNOC’s aim to confirm if such higher drainage translates into +20–30% absolute recovery improvement in practice over the field life. Early signs (e.g., improved pressure support and slower drawdown in fishbone wells) are encouraging3, but full-cycle recovery results are pending.

1/2

Documented Field Results: Radial Jet Drilling (Radial Laterals)

Radial Jet Drilling (RJD) has been tested in multiple onshore fields since the 1990s, particularly in mature, low-permeability oil reservoirs where conventional stimulation is uneconomic or impractical. Operator case studies demonstrate that RJD can significantly increase initial well productivity, though results vary:

Tarim Basin (K Field, China) – A 2012 RJD program in a shallow low-permeability siltstone reservoir revitalized an aging onshore oil field. By jetting multiple small-diameter (~2-in) laterals from existing wells, the operator achieved close to a 300% increase in production rates, tripling output4. This showed RJD as a viable low-cost alternative for boosting the productivity of thin, low-perm pay zones that had been underperforming with conventional vertical completions4.

Belayim Land Field (Sinai, Egypt) – RJD was applied by Petrobel (ENI) in early 2000s on three vertical wells producing from thin multi-layered sandstone intervals with modest porosity (~20%) and low to moderate permeability. Initial responses ranged from +30–80% jumps in gross oil rate (e.g., one well rose from 252 to 346 BOPD, ~+37%2, and another from 472 to 818 BOPD, ~+73%2). However, longer-term outcomes differed: one well sustained a ~30% net oil gain for ~1 year before declining while remaining above pre-job levels2; another saw a rapid post-RJD decline such that output fell below the pre-job baseline within months (attributed to high heterogeneity and reservoir depletion)2. Lesson: RJD can revive depleted zones temporarily, but benefits depend on reservoir quality – optimal in moderately pressured, continuous layers, whereas results are limited if the lateral intersects poor-quality or depleted rock.

Permian Basin (New Mexico, USA) – In 2015–2016, two trial wells in the Grayburg/San Andres formation (a low-permeability dolomitic reservoir) were stimulated with multiple coiled-tubing laterals using a mechanical short-radius drilling tool (an RJD alternative). One well with 12 laterals across 3 intervals achieved ~+40% oil rate increase1, while another with 15 laterals in an untapped zone saw ~+47% production rise1. Simulation models predicted that four 30-ft laterals per zone could yield ~28–33% incremental production (roughly in line with a ~20–30% recovery improvement in targeted zones)1. These trials confirmed that radial laterals in low-perm fields can appreciably boost output, though the absolute gains (under 2× in these cases) were more modest than some earlier RJD reports. Notably, the mechanical lateral method successfully overcame RJD’s known challenges (e.g. controlling lateral trajectory and penetrating harder rock) and validated the concept’s feasibility1.

2/2

Overall, RJD tends to deliver 2–5× increases in early oil rate in many ideal cases5. Historical field data from the 1990s reported 2- to 10-fold production boosts when shallow ~30–50 m radials were jetted to bypass near-wellbore damage in depleted wells5. This aligns with Petro Matad’s upper-end claim (up to ~1000% flow increase), albeit such extreme 8–10× gains are outliers observed under specific conditions (e.g. severe wellbore damage removal or hitting unswept compartments)5. More commonly, successful RJD applications in onshore low-permeability fields show doubling to tripling of initial output (200–300% increase)4.

However, operators caution that sustained gains vary. Short radials mainly influence near-term productivity, and their impact on long-term decline or ultimate recovery can be limited if the reservoir quickly reverts to its natural depletion trend. For instance, in Egypt’s Belayim field, one RJD-treated well’s production fell back to pre-job levels within a year due to pressure depletion and heterogeneity2. Proper candidate selection – favoring moderately to low-permeability zones with remaining oil saturation and sufficient pressure support (or water drive) – is critical for RJD’s long-run success. When applied in suitable settings, RJD can reduce decline rates and modestly extend field life, as evidenced by the Tarim and Belayim cases where RJD-additional oil was produced over many months before declines set in2. And because radial drilling is much cheaper than drilling new wells or full-scale hydraulic fracturing, even short-lived production gains can be economically attractive in brownfields.

No probs.

Currently I don’t know about anyone else directly financing Susnteppe JV entity except for the parent Sunsteppe entity. This refers to standard operating costs as of now with no project being construction ready. However we do have mentions of ACWA working on the studies, but no details. ZTE is I think more of a construction partner, and who knows how is it with Bondi Group, too little public info available.

Only going off the things publicly available, costs should be 50/50 with Sunsteppe parent entity contributing the other half.

Https://www.petromatadgroup.com/wp-content/uploads/2025/06/Petro_Matad_Limited_Annual_Report_2024.pdf

Page 51 (using the printed page numbers)

FY23 - 946k

FY24 - 663k

@Hamm

It’s a good in important question to be clear on. Best I can do now is consulting AI, and we need to ask this question for the AGM. I will send it to the IR inbox as well in case they respond sooner than AGM.

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In practice for Mongolian (and typical international) utility-scale solar + BESS IPP auctions:

• Pre-bid / EOI phase → modest costs (updated studies, legal, bid preparation, possible bid security). SRE’s consortium would cover these; Petro Matad, as 50% JV partner, would fund its share.

• Post-award / to financial close → significantly higher development costs (detailed design, environmental/permitting finalisation, power purchase agreement negotiation, bankable feasibility, performance guarantees/bonds). These are normally funded by the project sponsors (i.e. the JV and its consortium) before debt and any additional equity partners close the financing.

• Equity at financial close → standard project-finance structures for solar + BESS in emerging markets require sponsors to inject 20–40% equity (the rest debt). The winning IPP must demonstrate financial capacity; audited financial statements are required even at EOI stage. 

Petro Matad’s own disclosures have consistently noted that cash flow from its oil operations (Block XX / Heron) is intended to help advance SRE projects to “bankable / ready-to-build” status. There is no public indication that SRE has secured ring-fenced third-party development funding that would completely shield Petro Matad from any cash call. 

Caveats / mitigating factors

• Consortium / partners: SRE already mentions a “consortium” and has worked with ZTT and other Chinese/international players. Additional equity partners or EPC contractors could be brought in post-win to reduce Petro Matad’s share.

• Project finance: Once a PPA is secured and the project reaches financial close, the bulk of capex is usually non-recourse debt. But the sponsors still have to put skin in the game first.

• Scale and timing: The EOI itself is low-cost and non-binding. Real funding pressure comes only if shortlisted and then awarded.

Bottom line: Yes — Petro Matad would very likely have to put in some money (its 50% share of SRE’s development/equity costs) well before full outside debt or new partners close the deal. How much, and whether they choose to farm down or raise fresh capital to fund it, is not yet public and will depend on the final auction terms, the strength of the consortium, and Petro Matad’s own cash position from oil production.

This is standard for IPP developers in Mongolia’s renewables push (and globally). The fact that SRE already has feasibility work done for Choir positions them well, but winning still requires the JV (and therefore its 50% owner) to demonstrate funding commitment.

Https://www.londonstockexchange.com/news-article/MATD/petro-matad-operational-update/17465485

In RNS from 18 February 2026 regarding 50MW Battery Energy Storage System, it reads:

For its utility-scale Battery Energy Storage System (BESS) development at Choir, SRE's consortium is ready and well placed to participate in the government auction for the project. While awaiting the government's announcement of the auction timeline and terms, SRE is also assessing options to integrate large scale BESS with renewable and industrial power assets already in operation in country.

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This auction has now been announced. More information here:

https://energy.gov.mn/post/174968

REQUEST FOR EXPRESSION OF INTEREST IN THE SELECTION OF PROJECT IMPLEMENTERS FOR SOLAR POWER PLANTS + BATTERY STORAGE SYSTEMS

The Ministry of Energy of Mongolia (MoE) intends to implement approximately 220 MW solar power plant and 135MW/440MWh battery energy storage systems (BESS) Independent Power Producers (IPPs) projects across 5 locations through a competitive auction:

Lot 1 - 50MW Solar PV plant and BESS 30MW/100MWh IPP project (“the Project”) connected to grid substation Oyut located in Bulgan province;

Lot 2 – 20MW Solar PV plant and BESS 15MW/40MWh IPP project connected to the grid substation Undurkhaan located in Khentii province;

Lot 3 – 50MW Solar PV plant and BESS 30MW/100 MWh IPP project connected to the grid substation Kharkhorin located in Uvurkhangai province;

Lot 4 - 50MW Solar PV plant and BESS 30MW/100 MWh IPP project connected to the grid substation Choir located in Govisumber province; and

Lot 5 - 50MW Solar PV plant and BESS 30MW/100 MWh IPP project connected to the grid substation Mandalgovi located in Dundgovi province.

The IPP projects will include the solar power plant, BESS and all related infrastructure connecting to the grid substation. Foreign legal entities must submit an application to participate in this selection process jointly with a legal entity registered in Mongolia.

The MoE is looking for experienced private sector developers to design, finance, construct and operate the Project. To initially identify interested developers, expressions of interest are sought from companies with experience in developing similarly sized IPP or EPC projects.

IPP developers are permitted to express interests for one lot only.

Thanks @abzzba !

@gadgie yeah it would... And let's hope we see more actions that "just make sense"!

@gadgie last one from 2 days ago, nothing interesting showing currently.

If the slides with plan of action is something to go off, it states in May we should see Heron-1 de-wax and Heron 2 pump-out testing (2 months duration), followed by June's Gazelle electrification (1 month) and Gobi Bear flow test/completion taking until August. All these should be independent of farmout outcome, so I hope to see seeing activity shortly.