Petro Matad Regulatory News (MATD)

Petro Matad Limited

Preliminary results for year ended 31 December 2012

Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil explorer, announces its audited results for the year ended 31 December 2012.

Operational Highlights

·; Significant board and management changes.

·; Recent fundraising enables field operations to commence during the 2013 field season.

·; Farm-out opportunities being pursued as a means of developing vast acreage.

About Petro Matad Limited

Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. The Group holds the sole operatorship of three Production Sharing Contracts ("PSC") with the Government of Mongolia. Block XX has an area of 10,340km² in the far eastern part of the country. Blocks, IV and V are located in central Mongolia. Block IV covers approximately 29,000km² and Block V approximately 21,150km².

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.

Further information:

Petro Matad Limited

George Watkins, Chairman

+976 11 331099

NOMAD and Joint Broker

Westhouse Securities Limited

Richard Baty / Ian Napier

+44 (0)20 7601 6100

Joint Broker

Macquarie Capital (Europe) Limited

Steve Baldwin / Nicholas Harland

+44 (0)20 3037 2000

Directors' Statement

2012 was a year of dramatic change for Petro Matad. As the year began, it became clear that the early hope of an oil discovery in North Block XX had proved illusory and that the 2010 and 2011 drilling campaign had failed to discover oil. As a consequence, the Company suffered a loss of credibility in the market and a fall in share price. The failure of the drilling campaign was compounded by the fact that all eleven unsuccessful wells had been drilled within a very small and confined portion of the extensive acreage that Petro Matad has under licence in Mongolia. By being drilled in such a small area in Block XX, the wells provided only limited new and meaningful data that might help direct future exploration across the majority of the acreage.

The year ended with a strengthened board and a new management team in place, the management personnel responsible for the previous drilling campaign having left the Company. Most positively, the interpretation and evaluation of the total acreage, as opposed to one small corner of that acreage, has shown that the Company's three blocks have significant untapped exploration potential. This has not yet led to restoring full credibility in the Company and, in truth, we recognise that that may take some time and be dependent on the current board and management demonstrating that we are worthy of that trust. However, we hope that when you read the account of what has been done, both in this statement and in the technical review, you will agree that we are on the right track.

The major personnel changes that took place during the year began in March 2012 with the appointment of three new board members with considerable knowledge and experience in the global oil and gas industry. Dr Philip Vingoe has nearly 40 years' experience of the oil and gas industry, including 20 years with BP where he was Chief Geophysicist and General Manager for worldwide exploration. Since leaving BP, he has been involved with the start-ups and IPOs of Novus Petroleum and Panoro Energy, among others. David Skeels is a geologist with over 40 years' experience working in the oil and gas industry, including 20 years at Conoco focusing on upstream development and 10 years at BG Group where he was General Manager in Kazakhstan. Dr George Watkins has over 40 years' experience in the oil and gas industry including 30 years with Conoco where he was Vice President, Exploration and Production in both North America and the UK. Since retiring from Conoco, he has held non-executive directorships at companies such as Paladin Resources plc and Abbot Group plc.

Mr. John Henriksen was appointed CFO to the Company on 17 April 2012. Mr. Henriksen is a Qualified Accountant (Canada) with 36 years' experience in the oil and gas industry. For the previous five years, he was Country Manager (Indonesia) for Salamander Energy Plc. Prior to that, he had managerial positions in the finance departments of Vico, ENI and Lasmo plc.

Then in August 2012, Mr Ridvan Karpuz joined Petro Matad as Exploration Director from Austrian listed integrated oil and gas company OMV where he spent the last five years as an Exploration and Reservoir Manager working in Iran, Yemen and Tunisia. Mr Karpuz has 23 years' experience in oil and gas exploration and production and a proven track record of significant oil discoveries. Most significantly, Mr Karpuz has substantial experience establishing and building strong subsurface exploration teams and leading them to deliver successful 'fast-track' exploration programmes.

Both Mr. Henriksen and Mr Karpuz reside in Mongolia, operating from the Company's operating office in Ulaanbaatar, along with the other executive management team and technical personnel. Messrs Henriksen and Karpuz were appointed as board directors of the Company in December 2012.

Two other decisions flowed from the personnel changes. Petro Matad closed its representative office in Perth, Western Australia, from where certain functions of the group had been supported since the Company's inception. These functions are now supported by the Ulaanbaatar operational office. In May 2012, the Company also announced that the board had determined that further drilling or testing on Block XX should not be pursued before conducting a thorough re-appraisal of the exploration potential of that Block plus Blocks IV and V.

This re-appraisal began in August 2012 under the guidance of the Company's new Director of Exploration, Mr Ridvan Karpuz. In order to accomplish this task in the shortest possible time, Petro Matad's internal exploration team of 12 explorationists and geoscientists was supplemented at various stages by appropriate international technical consultants working in our offices in Ulaanbaatar and abroad.

This programme of work has included basin modelling and play fairway analysis across all three PSC Blocks IV, V and XX. The available seismic and geological data has been re-interpreted to provide a structural and depositional history of the individual basins. Geological field work has also been undertaken in Blocks IV and V in central Mongolia. The data from this field work, when integrated with the geologic section observed in the two stratigraphic holes drilled along the basin margins in those blocks, has also contributed to a better definition of basin evolution and hydrocarbon generation potential in the region. Most importantly, it has confirmed that the geologic section present in these basins matches that encountered in the prolific oil producing basins to the immediate south in China. As you will see described in the Technical Review, this analogy with the basins in China is very significant.

Review of all the data in Block XX threw up another interesting observation. The failure of the 2010 and 2011 drilling programme in Block XX has obscured the fact that the Competent Person's Report ("CPR"), prepared by ISIS Petroleum Consultants Pty Limited ("ISIS") in 2008 in connection with the Company's admission to AIM, identified three graben areas that lie on trend or en-echelon with the producing fields in the Tolson Uul Graben in Block XIX to the north. The ISIS CPR noted that "one or more of the grabens could contain the equivalent or a greater sedimentary section than has been defined in the Tolson Uul Graben". None of these grabens was tested by the drilling programme. Additionally, the interpretation work over the last six months has also identified a number of similar basins in the southern part of Block XX. Block XX has enormous unexplored potential and it was therefore a significant achievement for the Company when the Petroleum Authority of Mongolia ("PAM") granted a five year extension to July 2017 for the PSC on the block.

More information and discussion on the analogy with the basins in China and the potential of the PSCs for Blocks IV, V and XX is given in the Technical Review section.

Alongside the major effort being applied to a technical re-appraisal, the board also initiated an administrative review. Corporate governance has been strengthened by the introduction of a procurement policy document that sets out the process to be followed as well as authority limits for management and the board. A procurement committee has been established.

Ongoing costs for steady state management of the business, as opposed to costs associated with work programmes for seismic acquisition, processing and interpretation, etc. have also been reduced by one third, from $600,000 per month in the first half of 2012 to about $400,000 today. This has been achieved by looking carefully at all expenditures and not replacing many of the people who have left the group. While some of these positions may need to be filled when Petro Matad commences field operations again, it is likely that many of these roles can be undertaken by contractors and so avoid creating a higher base line cost for the longer term.

However, even though a number of good things were happening within the Company, there can be no disguising that, by the end of 2012, the Company needed additional funding in order to execute the sort of programme that the next phase of exploration demands.

In February 2013, with this in mind, the Company's Exploration Director, Ridvan Karpuz, gave a presentation at the 57th Oil Barrel conference in London to provide an update on the Company's portfolio of exploration assets in Mongolia and to advertise Petro Matad's strategy to seek farm-out partners in order to accelerate the exploration of the Company's acreage.

At the same time, Petro Matad announced that it had engaged Macquarie Capital (Europe) Limited ("Macquarie") to find a strategic partner to progress exploration activities. The three blocks comprise over 60,000 square kilometres and it is felt that the optimal means of exploring this vast acreage is through farm-outs and joint venture agreements.

Following the conference, a copy of the Company's presentation to delegates at Oil Barrel was made available on the investors' section of the Company's website. A link was also added to the website to allow access to information regarding the farm-out.

A virtual data room was opened in mid February 2013 for interested parties and a physical data room was opened in Macquarie's London office from early March. Access to the data rooms was restricted to industry participants on the basis of a signed confidentiality agreement.

In parallel, during April 2013, Petro Matad embarked on a round of institutional visits to inform shareholders and potential investors of the positive results of the recent interpretation work. Also, with one or two exceptions, Petro Matad had not met with any UK institutions for nearly 24 months and this road show round corrected this. While it was soon clear that the current market was not conducive to raising funds for small cap oil and gas companies, we nevertheless believe that this was a useful exercise. We are cognisant that market sentiment can change quickly and believe that these discussions will provide a useful background when considering possible fundraising in the future.

For the moment, we are fortunate to have a supportive shareholder in the Petrovis Matad Inc. (Petrovis) group who has agreed to an equity injection of $5 million into the Company which will allow the Company to commence preliminary field operations during the 2013 field season. As previously noted, the Company is also in the process of conducting a farm-out. The Company has had a number of international companies visit the data room. The data room is now closed and the Company is in discussions with those companies that have expressed an interest in pursuing the opportunity further. While there can be no guarantee that these discussions will result in a concluded transaction, the level of interest shown encourages the Petro Matad board in our technical evaluation of the merits of the acreage that we have under licence.

In concluding, the board would like to express their great appreciation for our staff, both technical and non-technical, who have worked with enthusiasm and diligence through what has been, and in some sense continues to be, an uncertain time for the Company. There is no doubt that, without their efforts, the Company would not have been able to make the progress that it has over the last year.

Technical Review

This technical review has been extracted from a fuller technical report that is contained within the Company's full annual report and accounts for the year ended 31 December 2012. The full technical report contains diagrams and illustrations that are not included within this statement. The annual report and accounts will shortly be available to shareholders on the Company's website.

Petro Matad holds an extensive land position in Mongolia covering prospective emerging and frontier hydrocarbon basins in PSC Blocks IV, V and XX. Together these PSCs have a total licence area of 60,000km2 within which the basin areas total 21,000km2.

In all there are 531,000km2 under licence in Mongolia. However, there has been only limited exploration drilling in recent years and there has been no exploration drilling in the western half of Mongolia. This is surprising given the prolific producing basins that lie just to the south across the border in China. These analogue basins in China have been widely explored resulting in numerous discoveries including a number of giant fields. For example, the Junggar basin, which provides a good analogy for Blocks IV and V, has reported reserves in excess of 9 billion barrels of reported recoverable reserves while the Erlian Basin to the south of Block XX has reported recoverable reserves of more than 600 million barrels.

Data from the stratigraphic wells drilled in Blocks IV and V combined with surface outcrop data from field studies has been used to build up a picture of the stratigraphy across these blocks. The stratigraphy is analogous to that in the China basins to the south and comprises a Permo-Carboniferous pre-rift megasequence overlain by a Jurassic-Cretaceous syn-rift megasequence. In places, these megasequences are separated by an angular unconformity. In turn, these are overlain by a Tertiary post-rift megasequence.

All production in Mongolia to date is from the syn-rift sequence. The producing fields in Blocks XIX and XXI are sourced from rich, oil-prone Upper Jurassic - Mid Cretaceous lacustrine shales which form both source and seal. The largest of these fields is the Tolson Uul field in Block XIX which has quoted recoverable reserves of 151 million barrels. This syn-rift sequence is also analogous to productive sequences in the Songliao and Erlian basins to the southeast in China.

As yet, there has been no well penetration of the Permo-Carboniferous pre-rift section and so this sequence remains unproven in Mongolia. However, this sequence has been explored extensively in the Junggar and Turpan basins to the southwest and has been found to contain multi-million barrels of recoverable reserves.

A closer analogy can be made between the producing Junggar and Turpan basins of China with the basins mapped in Blocks IV and V.

It has been discovered the Junggar basin area is not a single basin but a series of large sub-basins with production located within these sub-basins. This is the same basin frame work and size that we have observed in Blocks IV and V.

Comparison of seismic data across fields within the analogue basins suggests that similar trap types can be expected in Blocks IV and V. Similarities in structural and depositional styles have also been found when comparison of a seismic line over the Shenginkou and Shanshan fields in the Turpan basin was made with a seismic line across Block IV.

Recoverable reserves in the Junggar and Turpan basins are quoted as 9 billion boe and 400 million boe respectively. Using similar parameters to those from the Junggar and Turpan basins for Blocks IV and V, oil in place within these blocks is estimated to be in the order of 3.8 billion boe with resulting prospective recoverable resources of more than 1 billion boe.

The full Technical Report illustrates that a similar seismic analogue can be made between Block XX and producing Block XIX. The producing field areas of Block XIX are on trend with Block XX basins. The seismic sections in the southern half of Block XX document the same structural configuration. In all, six such sub-basins have been identified in the southern half of Block XX. This indicates a significant prospective potential of Block XX which hasn't been tested by drill-bit to date.

Based on the comprehensive technical evaluation done during 2012, Petro Matad's portfolio has been updated to include both emerging and frontier basins with potential for multiple petroleum systems and play types. A number of independent leads have been identified and high graded in Blocks IV, V and XX. The forward exploration work program focuses on de-risking the identified leads to mature them to drillable prospects in 2014.

Consolidated Statement of Comprehensive Income for the year ended 31 December 2012

Consolidated Statement of Financial Position as at 31 December 2012

Consolidated Statement of Cash Flows for the year ended 31 December 2012

Consolidated Statement of Changes in Equity for the year ended 31 December 2012

Notes to the Financial Statements for the year ended 31 December 2012

1. Corporate information

The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 December 2012 or 2011. The statutory accounts for the year ended 31 December 2012 have been finalised on the basis of the financial information presented by the directors in this preliminary announcement.

This financial report presents the consolidated results and financial position of Petro Matad Limited and its subsidiaries (together, the "Group").

Petro Matad Limited, a company incorporated in the Isle of Man on 30 August 2007 has five wholly owned subsidiaries, including Capcorp Mongolia LLC and Petro Matad LLC (both incorporated in Mongolia), Central Asian Petroleum Corporation Limited ("Capcorp") and Petromatad Invest Limited (both incorporated in the Cayman Islands), and Petro Matad Services Limited (incorporated in the Isle of Man). Its majority shareholder is Petrovis.

2. Summary of significant accounting policies

(a) Basis of preparation

This financial report complies with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ('IASB').

This financial report has been prepared on a historical cost basis, except where otherwise stated.

For the purpose of preparing the consolidated financial statements, the Company is a for-profit entity.

(b) Statement of compliance

This general purpose financial report has been prepared in accordance with the requirements of all applicable IFRS and Interpretations and other authoritative pronouncements of the IASB that have a material effect.

(c) Going concern note

The consolidated entity has incurred a net loss after income tax of $12.155 million (2011: Loss of $39.6 million) and experienced net cash outflows from operating activities of $11.0 million (2011: $35.1 million) for the year ended 31 December 2012. In addition and as outlined in Note 4(b) the consolidated entity is required to meet minimum exploration commitments in the next 12 months on its PSC's of approximately $17.0 million as at 31 December 2012.

Should the minimum exploration commitments for Blocks IV and V not be met and/or an alternative arrangement is not reached with PAM, the Company will be required to pay the shortfall (which at the end of 2012 stood at $9.9 million) to PAM at the end of the current PSC term, ending on 29 July 2014.

These conditions indicate a material uncertainty that may cast significant doubt over the consolidated entity's ability to continue as a going concern.

The ability of the consolidated entity to continue as a going concern is principally dependent upon raising additional capital of approximately $10 million by early 2014, vary and/or defer Blocks IV and V commitment expenditure and/or secure a farm-out agreement to fund minimum exploration commitments.

On 12 June 2013, Petrovis, signed an Equity Subscription Agreement with the Company that resulted in aggregate subscription monies of $5,000,000 being received on 25 June 2013. Excluding current exploration commitments on PSC Blocks IV and V, this injection of funds enables the Company to operate as a going concern with respect to funding ongoing working capital commitments and operating expenses.

With respect to the current shortfall in expenditures on PSC Blocks IV and V, the Company is engaged in discussions for possible farm-out of the interests in these blocks to potential investors. It is anticipated that the investor would take on part or all of the spend on these blocks as part of the farm-out arrangements. If an agreement is reached, the Company reasonably expects it would be finalized before the end of the third quarter of 2013. In the absence of a farm-out being concluded the Company would engage PAM in discussions to reschedule current PSC term expenditure commitments. The Company has not formally initiated such discussions with PAM and does not intend to do so until the results of the current farm-out process are known. For Block XX, the Company has previously negotiated PSC exploration term extensions and re-phasing of commitments, which indicates an extension and re-phasing of commitments may be possible.

The directors have prepared a cash flow forecast, which indicates that the consolidated entity will have sufficient cash flows to meet all commitments and working capital requirements for the 12 month period from the date of signing the financial report if they are successful in securing funding and/or deferral of exploration commitments as referred above.

The directors are satisfied that they will achieve resolution of the matters set out above and therefore the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

Should the consolidated entity be unable to achieve the matters referred to above, there is a material uncertainty whether the consolidated entity will be able to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business and at amounts stated in the financial report.

The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

(d) Basis of consolidation

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

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

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

(e) Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred by the Group is expensed separately for each area of interest. The Group's policy is to expense all exploration and evaluation costs funded out of its own resources.

(f) Exploration and evaluation assets

Exploration and evaluation assets arising out of business combinations are capitalised as part of deferred exploration and evaluation assets. Subsequent to acquisition, exploration expenditure is expensed in accordance with the Company's accounting policy.

(g) Impairment of tangible and intangible assets other than goodwill

At each reporting date, the Group assesses whether there is any indication that tangible and intangible assets may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount for each asset or cash generating unit to determine the extent of the impairment loss (if any). Where the carrying amount of an asset (or cash-generating unit) exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the assets (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of impairment loss is treated as a revaluation increase.

Impairment review for deferred exploration and evaluation assets are carried out on a project-by-project basis, which each project representing a potential 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.

(h) Earnings per share

Basic earnings per share is calculated as net profit attributable to owners of the parent, adjusted to exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to owners of the parent, adjusted for:

·; costs of servicing equity (other than dividends);

·; the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

·; other non-discretionary changes in revenues or expenses during the year that would result from the dilution of potential ordinary shares, divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

3. Loss per share

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

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

There have been further transactions involving ordinary shares since the reporting date and before the completion of these financial statements, details of these can be found in Note 5 Events after the reporting date.

4. Commitments and contingencies

(a) Operating lease commitments

Operating leases relate to premises used by the Group in its operations, generally with terms between 2 and 5 years. Some of the operating leases contain options to extend for further periods and an adjustment to bring the lease payments into line with market rates prevailing at that time. The leases do not contain an option to purchase the leased property.

The Group has committed to office, warehouse and camp container leases in Mongolia in the amounts of $105,000 for 2013.

(b) Exploration expenditure commitments

Petromatad Invest Limited and Capcorp have minimum spending obligations, under the terms of their PSC's on Blocks IV, V and XX with PAM.

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

Prior year expenditure over and above minimum exploration work obligations may be used to reduce the following year's obligation. As Block XX expenditure in prior years has significantly exceeded minimum PSC commitments, the Company has the option to reduce its spending in Block XX for next year to year 10 (July 2015). On 22 August 2012, PAM granted a five-year extension for Block XX, meaning that the Company's PSC is therefore in effect until 04 July 2017. Due to the prior focus on Block XX, cumulative expenditures on Blocks IV and V are currently below the cumulative minimum PSC commitment of $9.9m. Discussions with PAM will be held to obtain their approval for future work programme proposals on these blocks.

The work programme planned for the three blocks in 2013/2014 has been largely defined and will include new seismic and wells in each block. The full extent of the work programme will be dependent on the level of capital raised and farm-out negotiations which are currently in progress. In event that the Company is unable to complete a successful farm-out or agree a moratorium with PAM for Blocks IV and V, the Company would have an obligation to repay the underspent amount of its minimum obligation commitments at the end of the PSC contract period.

Petromatad Invest Limited and Capcorp can voluntarily relinquish their rights under the PSC's, if the minimum work obligations are completed.

(c) Contingencies

There are no contingencies outstanding at the year end.

5. Events after the reporting date

On 25 January 2013, pursuant to the Group's Plan, 500,000 shares were awarded upon exercise ofConditional Share Awards with an exercise price per share of $0.01.

In recognition of the need to enhance portfolio management, accelerate work program activities, and to diversify exploration risk, the Company has embarked on a farm-out process and to this end opened a data room in February 2013. A significant number of parties visited the data-room with several expressing technical interest in the exploration potential of the Company's three PSCs. As of the date of this report discussions with interested parties continue.

In April 2013 the Company commenced a fund raising effort and in conjunction with its joint brokers conducted an institutional road show. While the road show was well received and successful in outlining the potential of the Company's exploration holdings, market sentiment remains bearish and institutional investors' appetite for junior exploration companies continues to be subdued. Although the Company received investment offers they cumulatively were insufficient to meet minimum targets and alternative means of funding the Company were explored.

On 12 June 2013, Petrovis, signed an Equity Subscription Agreement with the Company that will result in the issuance of 90,612,540 ordinary shares to members of the Petrovis Group at a Subscription price of £0.0356 per share. The proceeds have been received by the Company and will be used to fund the Company's ongoing operations which is planned to include work program activities in the second half of 2013.

6. Timetable and distribution of accounts

The Company's statutory annual report and accounts will be dispatched electronically to shareholders tomorrow and will be posted to shareholders who have elected to receive hard copies of the Annual Report in the next few days. Additional copies of the Annual Report and Accounts may be requested directly from the Company and an electronic copy will be available on the Company's website www.petromatad.com.

7. Notice of Annual General Meeting ("AGM")

A notice of the Company's AGM to be held on 11 September 2013 at 4 p.m. local time (9 a.m. BST) at Petrovis Building, Amar Street 8, Sukhbaatar District, Ulaanbaatar, Mongolia will be distributed with the Company's annual report. Further copies of the Notice of AGM are available from the Company and on its website.