Petro Matad Regulatory News (MATD)

Petro Matad Limited

('Petro Matad' or the 'Company')

Interim results for the six months ended 30 June 2013

LONDON, 23 September 2013: Petro Matad Limited, the AIM quoted Mongolian oil explorer, announces its unaudited interim results for the six months ended 30 June 2013.

Overview

Since the publication of the 2012 Annual Report, exploration studies have continued under the guidance of the Company's 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. As recently announced, the Company has awarded a contract to Khet Co., Ltd for acquisition of 200 kms of 2D seismic in Blocks IV and V in Central/Western Mongolia. Acquisition will commence in early October and is expected to take about six weeks. The seismic program is designed to provide detailed coverage over a series of leads identified from earlier seismic and is expected to confirm at least two locations for wildcat drilling in 2014.

Blocks IV & V

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

A limited 2D seismic survey of 35 line kilometres will commence in October, which is designed to define the extension of a large thrusted anticline lead in the Batsagaan Trough Basin, at the centre of Block IV. The lead is currently covered by previously acquired limited 2D seismic lines, which showed it to be a large, long-lived anticline with potentially stacked pays adjacent to a deep and potential hydrocarbon-generating basin.

In the Taatsiin Basin in the south west of Block V, 165 kilometres of 2D seismic will be acquired over a large anticline structure with several compartments including multiple leads that have been preliminarily identified from 2D seismic shot by the Company in 2011. The structure is adjacent to the deepest basin (4,000m) identified in Blocks IV and V. The earlier drilled stratigraphic core-hole at the basin margin proved the existence of oil stained reservoir rocks and source rock intervals.

Both of the 2D seismic surveys are designed to generate drill targets in these frontier basins. The planned wells will be the first exploration wells to test the multiple plays in Central/Western Mongolia.

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 sub-basins in the central and southern portions of Block XX, with further scout 2D seismic on the more promising areas planned for 2014.

Corporate

Shortly before the period end the Company raised $5 million before expenses through the issuance of shares to its largest shareholder Petrovis Matad Inc. ("Petrovis") and Petrovis' underlying owners. The Company is grateful for the continued support of Petrovis and the funds have enabled field operations to continue. It is the intention that the ongoing work programme will significantly progress the Company's understanding of the frontier portfolio of assets within Blocks IV and V and has been designed in conjunction with the ongoing farm-out process.

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

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

STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 30 JUNE 2012

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2013

CONDENSED CASH FLOW STATEMENT

FOR THE HALF YEAR ENDED 30 JUNE 2013

STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 30 JUNE 2013

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 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 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 2012. 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 2012.

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 2013.

(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. 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).

In both cases the subscription of 90,612,540 shares (note 3) is excluded from the loss per share calculations as these shares were not issued until after the Balance Sheet date.

CONSOLIDATED

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 2013, pursuant to the Group's Plan, 112,000 options over shares were granted to employees with an exercise price per share of GBP0.0425, exercisable in three parts as follows:

· 33% after 9 Jul 2014;

· 33% after 9 Jul 2015;

· 34% after 9 Jul 2016.

On 9 July 2013, pursuant to the Group's Plan, 176,000 Conditional Share Awards over shares were granted to employees with an exercise price per share of $0.01.

The Conditional Share Awards will vest on achievement of the following performance conditions:

· 25% vest on the first discovery of oil on a commercial scale;

· 25% vest on the first production of oil on a commercial scale;

· 50% vest on the Group achieving the sale of 1 million barrels of oil.

On 20 July 2013, pursuant to the Equity Subscription Agreement with Petrovis Matad Inc. (Petrovis), 90,612,540 shares were issued with an exercise price of GBP0.0356 per share. USD5,000,000 from the subscription had been received on 25 June 2013. To match with subscription proceeds of USD5,000,000 (received prior to Balance Sheet date), these shares are included in Note 3.

On 20 July 2013, pursuant to the Group's Long Term Equity Incentive Plan, employees were issued with a total of 671,550 shares on exercise of Conditional Share Awards at an exercise price of $0.01 per share.