Petro Matad Limited, the AIM quoted Mongolian oil company, announces its unaudited interim results for the six months ended 30 June 2024.
Financial Summary 1H 2024
The Group posted a loss of USD 2.56 USD million for the 6-month period ended 30 June 2024, which compares to a loss of USD 1.90 million for the comparable period in 2023. The Company's cash balance at 30 June 2024 was USD 1.93 million (USD 0.77 million in cash and USD 1.16 million in Financial Assets), which compares to a cash balance of USD 8.39 million (USD 0.82 million in cash and USD 7.57 million in Financial Assets) on 30 June 2023.
As previously announced, a successful fundraise totalling USD 9.4 million of gross proceeds was completed in July 2024 to fund commencement of production and development of the Heron oil discovery in Block XX and to continue to develop renewable energy projects through the SunSteppe Renewable Energy (SRE) joint venture.
Operational Summary 1H 2024 and look ahead
On the Company's Block XX in eastern Mongolia where the Heron oil discovery had been ready for the first phase of development for some time, the land access issue continued to delay activities through the first half of 2024. The hold up was due to delay in the government completing the registration of Block XX as State Special Purpose Land even though this had been approved by the cabinet in July 2023. With the matter delayed at provincial level, Petro Matad was able to secure land use agreement at the district level in late May 2024 that allowed operational activity to go ahead in the second half of the year.
Following the reporting period, the Company has announced the downhole completion of the Heron-1 discovery well, the commencement of drilling of the Heron-2 development well and the plans to spud the Gobi Bear-1 exploration well. Operational activities are focussed on starting production from the discovery and securing a route to market for the oil.
On the Block V Production Sharing Contract (PSC) in central Mongolia, with the expiration of the exploration period due in late July 2024, the Company undertook all the necessary work to hand back the acreage to the government in good order. This work was completed ahead of the expiration of the period on 28 July 2024.
MRPAM's Exploration Tender Round offering new PSC areas continued through the first half of the year although progress was held up by the late June 2024 parliamentary elections. As previously reported, the Company has been selected as the preferred contractor for the two blocks for which it submitted applications. Following the parliamentary elections the Company has been advised that the process to award the new PSCs is now progressing.
The Company's renewable energy initiative continued to make good progress in the first half of 2024. The SunSteppe Renewable Energy (SRE) joint venture had high graded two projects for development. The first project involves the provision of Green Hydrogen to Mongolia's major Oyu Tolgoi copper and gold mine in which Rio Tinto is the major investor. An exclusive Memorandum of Understanding was signed with Oyu Tolgoi and the Japanese Overseas Environmental Cooperation Centre (OECC) to develop the project and supply Green Hydrogen to be used to provide heat to facilities at the mine. Through the involvement in the venture of OECC, the partnership was able to secure some Japanese Government grant funding and an application for further grant funding is expected to be made in due course.
SRE's second high graded project is the Choir 50MW Battery Energy Storage System (BESS). The government has identified the need for a substantial BESS at Choir to help stabilise the grid and reduce high-cost import of power from China and Russia at peak hours and the economically wasteful export of power during off peak periods. SRE secured approval of the feasibility study from the Ministry of Energy for a 50MW BESS project at Choir and began preparation of the application for the licence to construct which continued beyond the end of the reporting period.
In parallel with bringing its two high graded projects to construction readiness expeditiously, SRE is reviewing a number of other renewable energy opportunities in Mongolia in order to add the most attractive to its high graded portfolio.
Mike Buck, CEO of Petro Matad, said:
"The progress made on the land issue in 1H 2024 has been a long time coming but with permits now in hand, our successful fund raise in July has allowed operational activity to commence in earnest with downhole completion of Heron-1, spud of Heron-2, plans to spud Gobi Bear-1 and preparations for production start up.
I would like to thank the entire Petro Matad team for their relentless work, in often frustrating conditions, so far this year and we look forward to updating shareholders on the progress and conclusion of several workstreams in the months to come."
