Petro Matad Regulatory News (MATD)

Petro Matad Limited

('Petro Matad' or the 'Company')

Interim results for the six months ended 30 June 2019

LONDON, 3 September 2019: Petro Matad Limited, the AIM quoted Mongolian oil explorer, announces its unaudited interim results for the six months ended 30 June 2019.

Financial Summary

The Group posted a loss of USD 4.41 million for the six-month period ended 30 June 2019, which compares to a loss of USD 6.65 million for the comparable period in 2018. The Company's cash balance at 30 June 2019 was USD 16.12 million (USD 3.79 million in cash and USD 12.33 million in Financial Assets), which compares to a cash balance of USD 15.55 million (USD 12.54 million in cash and USD 3.01 million in Financial Assets) on 30 June 2018.

Following the two successful placings in 2018, no new fund raises have been undertaken in 2019 as the Company's cash resources are sufficient to fully meet the costs of the planned 2019 drilling programme.

Operational Update

The Heron 1 exploration well in the Tamsag Basin of Block XX spudded with the DQE International 40105 rig on 19 July 2019. Land permits for Heron (and Gazelle) have been received and drilling operations continue towards a planned total depth (TD) of 3,050 metres. The well is an appraisal of the T19-46 oil field immediately to the north in Block XIX and is targeting a prospect with 25 MMbo of Mean Prospective Recoverable Resource. The Company expects to be in a position to announce the results of the drilling and logging of the well during the week commencing 9 September 2019.

The Gazelle 1 exploration well will follow Heron 1 after a six-kilometre rig move and will take approximately 35 days to drill and log. The planned TD is 2,500 metres and the Gazelle Prospect has an estimated Mean Prospective Recoverable Resource of 13 MMbo. Gazelle 1 is located updip of Petro China's T19-46-1 oil well on the western flank of the Tamsag Basin which is the primary source kitchen for the fields in Block XIX.

The Red Deer 1 exploration well in the Asgat Sag Basin of Block XX spudded with the Daton Petroleum Engineering and Oilfield Service LLC rig, DXZ1, on 4 August 2019. The well is targeting a prospect with 48 MMbo of Mean Prospective Recoverable Resource. Drilling operations continue towards the planned TD of 2,100 metres. Results from the drilling and logging of the well are expected to be completed by mid-September 2019.

In the event of a discovery in one or more of the 2019 exploration wells, the Company will bring in a separate rig for testing. A call-off testing contract has been signed, which ensures testing operations, if warranted, can commence soon after discovery. 

The Company successfully obtained two-year PSC extensions for Blocks IV and V, as was announced on 26 June 2019.

Further operational updates will be provided in due course.

-Ends -

Further information please contact:

 All Reserves and Resources definitions and estimates shown in this report are based on the SPE/AAPG/WPC/SPEE Petroleum Resource Management System ("PRMS").

Technical information in this news release has been reviewed by the Company's Exploration Manager, Mr. Jerry Smart. He has 37 years of industry experience in oil and gas exploration and production with LASMO, Eni, Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's College, London.

Glossary

MMbo Million barrels of oil

Mean The arithmetic average of the low, mid and high case estimates of recoverable prospective resources

Prospective Resources Estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled

TD Total Depth

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 three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,367 square kilometres in the far eastern part of the country, and Blocks IV and V have an area of 29,062 square kilometres and 21,143 square kilometres, respectively, 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. 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 30 JUNE 2019

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2019

CONDENSED CASH FLOW STATEMENT

FOR THE HALF-YEAR ENDED 30 JUNE 2019

STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 30 JUNE 2019

1. CORPORATE INFORMATION

The financial report covers the consolidated entity of Petro Matad Limited and its controlled entities.

Petro Matad Limited, a company incorporated in the Isle of Man on 30 August 2007 has four 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). Its major shareholder is Petrovis Matad Inc.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half-year financial report should be read in conjunction with the annual Financial Report of Petro Matad Limited as at 31 December 2018. The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2018.

It is also recommended that the half-year financial report is considered together with any public announcements made by Petro Matad Limited and its controlled entities during the half-year ended 30 June 2019.

(a) Basis of Preparation

The half-year consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ('IASB'). The half-year financial report has been prepared on a historical cost basis, except where stated.

The financial report is presented in US dollars and all values are rounded to the nearest thousand dollars ($'000).

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

(b) 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.

3. CONTRIBUTED EQUITY

(i) Ordinary shares

Full paid ordinary shares carry one vote per share and carry the right to dividends.

4. RESERVES

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

5. EARNINGS/(LOSS) PER SHARE

The following reflects the income and share data used in the total operations basic and diluted earnings/(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.

6. EVENTS AFTER THE REPORTING DATE

None