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Petro Matad Announces Final results for year ended 31 December 2019

Source: 6/15/2020, Location: Asia

Petro Matad Limited ("Petro Matad"), the AIM quoted Mongolian oil explorer, announces its audited final results for the year ended 31 December 2019. All dollar values are expressed in United States dollars unless otherwise stated.

Operational Highlights

Three wells in Block XX, Heron-1 and Gazelle-1 in the northern part of the block and Red Deer-1 in the southern area, were completed within the 2019 drilling season and within budget.

All three wells found oil shows, with Heron-1 declared a discovery after recording one of the highest flow rates recorded in Mongolia with 821 barrels of oil per day (bopd) produced during drill stem testing, achieved without use of artificial lift or fracking, in what the Company believes are commercial quantities.

Gazelle-1 found two thin oil pay zones however due to the onset of winter weather the well was suspended as a potential oil discovery without being tested and so will be fully evaluated in the future, Red Deer-1 was plugged and abandoned with no oil pay zones detected.

Application made for an Exploitation Licence covering the Heron and Gazelle discoveries which will allow the Company to move into development and production.

Post period end

The Block XX Exploitation Licence application continues to progress through the government's approval process and is now with expert auditors appointed by the Ministry of Mining and Heavy Industry.

Plan of Development documentation is nearing completion and will be ready for submission to the Ministry once the Reserves Report has been approved.

The Company applied for and has been granted moratoria on Block V and Block XX which stop the clock on the Exploration Periods of the respective PSCs. The moratorium on Block XX avoids the possibility of the exploration period expiring in July 2020 before the Exploitation Licence has been granted by the Mongolian government.

The impact of the Covid-19 pandemic on Petro Matad's activities has been limited as Government ministries have been open and functioning as normal throughout. The Company is liaising with the authorities and taking all precautions to ensure the safety of its staff and contractors.

Financial Highlights

As at 31 December 2019, the Group's cash position was $4.3 million, including Term Deposits (Financial Assets) (31 December 2018: $21.3 million)

The Group's current cash position is $2.3 million, which in conjunction with previously announced cost saving measures will be sufficient, in absence of new fundraising, for the Company to operate until the end of Q1 2021. Implementation of additional cost saving measures would extend this to the end of Q2 2021. Importantly, the Company has retained sufficient key staff to remain in an operational ready state.

The Group's net loss after tax for the twelve months ended 31 December 2019 was $16.8 million (31 December 2018: loss $18.4 million)

No dividends have been paid or are proposed in respect of the year ended 31 December 2019 (2018: Nil).

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