Petro Matad Regulatory News (MATD)

Petro Matad Limited

('Petro Matad' or the 'Company')

Interim results for the six months ended 30 June 2012

LONDON, 28 September 2012: Petro Matad Limited ('Petro Matad' or 'the Company'), the AIM quoted Mongolian oil explorer, announces its unaudited interim results for the six months ended 30 June 2012.

Overview

Since the publication of the 2011 Annual Report, exploration studies have continued under the guidance of the Company's new Director of Exploration, Mr Ridvan Karpuz. The internal exploration team of 12 explorationists and geoscientists has also been supplemented at various stages by appropriate international technical consultants working in our offices in Ulaanbaatar and abroad.

Work is well advanced on basin modelling, play fairway analysis, reassessing earlier petrophysics studies and re-interpreting various seismic and geological data. In addition, a geological field team has conducted exploration fieldwork in Blocks IV and V in central Mongolia, performing follow up work to collect field data in prospectivity-critical field localities. Field data will be used to better constrain basin evolution and hydrocarbon generation potential of the region.

The last of the environmental rehabilitation work on Block XX, which was required following the completion of the 2011 drilling programme, is being finalised with the camp being winterised and put into secure, maintenance mode.

While the overall studies on all parts of all Blocks are progressing, some fast track alternatives on more promising areas have also been generated.

Block XX

While much work still lies ahead for the overall studies of Block XX, the exploration team has preliminarily focussed on the Toson South area. The Toson South potential leads lie in the proven and producing kitchen extending from Block XIX, the Production Sharing Contract (PSC) immediately to the north of Block XX, operated by Petro China subsidiary Daqing Oilfields. Scout data from Block XIX is being integrated into the Toson South studies, supplementing the Company's existing database in order to develop analogues with Toson Uul.

The Toson South leads lie five to eleven kilometres to the west of the Davsan Tolgoi anticline. The area is structurally complex, and at this time covered with 2D seismic. Acquiring a limited 3D seismic programme over nine separate early leads is being considered, with the intention of de-risking those leads and the generation of drill targets.

Evaluation work is proceeding on the eight other frontier basins in the central and southern portions of Block XX, with further scout 2D seismic on the more promising areas planned for 2013.

Blocks IV & V

Studies on Blocks IV and V have identified nine frontier basins covering 15,000km2 on the two PSCs. Of those, two were initially targeted for more intense, early exploration activity.

Consideration is being given to a limited 2D seismic survey of 215 line kilometres for a thrusted anticline lead in the Batsagaan Trough Basin, at the centre of Block IV. Currently covered by limited 2D seismic lines, this is a large, long-lived anticline adjacent to a deep, potentially hydrocarbon-generating basin.

In the Taatsiin Basin in the south west of Block V, 205 kilometres of 2D seismic are planned over an inversion anticline that has been preliminarily identified from appreciable 2D seismic shot by the Company in 2011. The lead is adjacent to the deepest basin (4,000m) identified in Blocks IV and V.

Both of the 2D seismic surveys are designed to generate drill targets in these frontier basins.

Oil Shale

Test work on samples of oil shale from the Khoid Ulaan Bulag (KUB) oil shale occurrence continued. Mineralogy analysis has demonstrated a carbonate and quartz-feldspar rich composition not dissimilar to the Green River Formation in the United States of America. Extended Fischer Analysis work on a 10kg sample resulted in one litre of 29° API oil being produced and this is being used for display and further chemical testing procedures.

Additional Updates

The Board of Directors recently met in Ulaanbaatar, after the Company's Annual General Meeting. Amongst other business the Board was presented with a summary of the progress of these studies. The Board undertook to study funding options in order to progress the programmes. It also recommended preliminary studies to be conducted on the possibility of attracting farm-in partners to accelerate the exploration of the Company's vast PSC holdings.

All technical information has been reviewed by the Company's Director of Exploration, Mr Ridvan Karpuz. Mr Karpuz is a petroleum geologist with 24 years of experience in European, African and Middle East exploration and development.

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 sole operatorship of three Production Sharing Contracts 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

Douglas J. McGay - CEO

+976 11 331099

NOMAD and Joint Broker

Westhouse Securities Limited

Richard Baty / Petre Norton

+44(0)20 7601 6100

Joint Broker

Macquarie Capital (Europe) Limited

Jeffrey Auld / Steve Baldwin / Nicholas Harland

+44(0)20 3037 2000

Investor and Public Relations

RLM Finsbury

James Leviton

+44(0)20 7251 3801

STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 30 JUNE 2012

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2012

CONDENSED CASH FLOW STATEMENT

FOR THE HALF YEAR ENDED 30 JUNE 2012

STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 30 JUNE 2012

1. CORPORATE INFORMATION

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

Petro Matad Limited is a company incorporated in the Isle of Man on 30 August 2007, which has five wholly owned subsidiaries, Capcorp Mongolia LLC and Petro Matad LLC (both incorporated in Mongolia), Central Asian Petroleum Corporation Limited and Petromatad Invest Limited (both incorporated in the Cayman Islands), and Petro Matad Services Limited (incorporated in the Isle of Man). Together collectively referred to as the "Group".

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 2011. 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 2011.

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 2012.

(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 Australian equivalents to International Financial Reporting Standards ("IFRS") and AASB 134. 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 half-year consolidated financial statements comprise the financial statements of Petro Matad Limited and its controlled subsidiaries ('the Group').

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.

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. LOSS PER SHARE

Basic loss per share amounts are calculated by dividing net loss for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.

Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary shareholders (after deducting interest on the convertible redeemable preference shares) by the weighted average number of ordinary shares outstanding during the period (adjusted for the effects of dilutive options and dilutive convertible redeemable preference shares).

Share options and Performance 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

On 9 July 2012, pursuant to the Group's Plan, employees were issued with a total of 164,533 shares on exercise of Performance Share Awards at an exercise price of $0.01 per share.

On 16 July 2012, pursuant to the Group's Long Term Equity Incentive Plan ("Plan"), 1,198,080 Options on ordinary shares, with an exercise price of GBP0.0888 per share were issued to employees. The vesting terms of the Options were as follows:

·; For 99,000 Options: 33% vesting on 9 January 2013, 33% vesting on 9 July 2013 and 34% vesting on 9 January 2014

·; For 16,080 Options: 7920 vesting on 9 July 2013 and 8160 vesting on 9 January 2014

·; For 298,000 Options: 33% vesting on 6 October 2012, 33% vesting on 6 October 2013 and 34% vesting on 6 October 2014

·; For 75,000 Options: 33% vesting on 29 September 2012, 33% vesting on 29 September 2013 and 34% vesting on 29 September 2014

·; For 90,000 Options: 33% vesting on 1 August 2012, 33% vesting on 1 August 2013 and 34% vesting on 1 August 2014

·; For 210,000 Options: 33% vesting on 5 January 2013, 33% vesting on 5 January 2014 and 34% vesting on 5 January 2015

·; For 60,000 Options: 33% vesting on 4 January 2013, 33% vesting on 4 January 2014 and 34% vesting 4 January 2015

·; For 350,000 Options, 50,000 vesting on 16 January 2013, 100,000 vesting on 16 July 2013 and 250,000 vesting on 16 July 2014

On 16 July 2012, pursuant to the Group's Plan, 660,000 Performance Share Awards on ordinary shares, with an exercise price of $0.01 per share were issued to an employee. The vesting terms relating to 220,000 vested on the day after the issuing date and the remaining 440,000 will vest in two equal instalments 22 November 2012 and 22 November 2013.