Petro Matad Regulatory News (MATD)

Petro Matad Limited

('Petro Matad' or the 'Company')

Interim results for the six months ended 30 June 2016

LONDON, 26 August 2016: Petro Matad Limited, the AIM quoted Mongolian oil explorer, is pleased to announce its unaudited interim results for the six months ended 30 June 2016.

Financial Summary

The Group posted a profit of USD 0.1 million for the six-month period ended 30 June 2016, which compares to a loss of USD 1.74 million for the comparable period in 2015. The profit recorded reflects cash calls received in 2016 from BG Group (Shell) to fund operations under the farm-out agreement prior to receipt of BG Group's exit notice. The Company's cash balance at 30 June 2016 was $0.49 million, which compares to a cash balance of $2.51 million on 30 June 2015.

As reported in the announcement of 11 August 2016, $10,005,303 has been received from Shell's affiliate, BG Mongolian Holdings Limited (BGMH) and a further $5 million is payable upon Mongolian Government approval of the reassignment of BGMH's interest in Blocks IV and V to Petro Matad. Following receipt of these funds the Company will be in a position to execute its exploration program for the next twelve months.

Operational Update

As announced on 29 April 2016, BGMH issued an Exit Notice to the Company which formally advised of their intention to relinquish their interests in Blocks IV and V. Upon receipt, the Company commenced discussions with Shell/BGMH which ultimately resulted in an agreement on exit payments to be made by BGMH, as summarized in the above Financial Summary. With the exit payments provided by BGMH the Company will be able to continue with the previously planned Block IV and V exploration programs.

Following the Company's acquisition of 1085 kms of 2D seismic in Block IV in the fourth quarter of 2015, seismic operations were suspended for the winter. In May 2016, seismic operations recommenced in Block IV with the acquisition of 174 kms of 2D "infill" seismic. These lines were acquired to better define leads identified during the acquisition program in Block IV in late 2015. The combined seismic acquisition from Block IV has been processed and is currently being interpreted. The Company is encouraged by results to date, and has already identified a series of leads. The Company is confident that a number of drill-ready prospects will emerge.

Following completion of the Block IV program, a 2D seismic acquisition program commenced in early June 2016 in Block V consisting of 402 km, of which 245 km have now been acquired. Due to dynamite quality issues the program was suspended in early July. The seismic contractor is in process of acquiring new dynamite charges and the remainder of the program is expected to be acquired during September and October 2016. The remaining seismic program is aimed at de-risking leads and defining a potential drill location in Block V. Processing of data acquired to date is underway and interpretation and prospect generation is progressing.

The leads inventory of both Blocks IV and V will be peer reviewed and qualified prospects will be high-graded to drill-ready status prior to exploration drilling, expected in mid-2017. Further details on the planned exploration program will be announced once specific drill locations have been chosen.

Scouting information suggests that there are several rigs within Mongolia that are capable of drilling exploration wells to the depths that the Company will be targeting. Well engineering and preparation of the rig tender documentation are in process and the Company expects to issue its drilling tender before the end of 2016.

Further operational updates will be provided in due course.

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 NOMAD and Broker

Ridvan Karpuz, CEO Stockdale Securities Limited

+976 70141099 / +976 75751099 Richard Johnson / David Coaten

+44 (0)20 7601 6100

STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 30 JUNE 2016

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2016

CONDENSED CASH FLOW STATEMENT

FOR THE HALF YEAR ENDED 30 JUNE 2016

STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 30 JUNE 2016

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 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 2015. 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 2015.

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 2016.

(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

On 1 August 2016, the Company announced that agreement had been reached with Shell regarding the amount of exit payment to be paid to CapCorp. Under the terms of the agreement, Shell's affiliate (BGMH) was to pay an initial exit amount of $10,005,303 as stipulated by the Farmout Agreement and would pay a further $5,000,000 upon completion of requisite government approvals in relation to the reassignment of BGMH's 78% working interest to CapCorp. This further amount of $5,000,000 is refundable to BGMH, should CapCorp secure a partner for any of the two Blocks during the exploration period or any extension of exploration period. Any farmout entered into by CapCorp with a third-party company will be at Capcorp's discretion.

On 11 August 2016, the Company announced that the initial exit payment of $10,005,303 was received from BGMH.