Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • MATD raises GBP 2.84 million via share placing and director participation at 0.80p/share.
  • MATD proceeds to support well testing, grid connection at Heron-1, and renewable JV SunSteppe.
  • MATD isssued 355.4 million new shares , equal to 19.3% of enlarged share capital.

Petro Matad Limited (LSE:MATD), a Mongolia-focused oil and gas company, has conditionally raised gross proceeds of approximately GBP 2.84 million through a share placing and director subscription at a price of 0.80 pence per share. This includes the issue of 355,419,117 new ordinary shares, representing about 19.32% of the company’s enlarged share capital.

The fundraising comprises a placing of 323,250,000 shares to institutional and professional investors, as well as subscriptions totalling 32,169,117 shares from a director and a substantial shareholder. The company’s CEO, Mike Buck, subscribed for shares worth GBP 50,000, while Petrovis Matad Inc., a significant shareholder, subscribed for shares worth GBP 300,000.

The funds raised will be directed toward multiple initiatives across Petro Matad’s portfolio. A primary focus is the Heron field, where the company plans to reduce operational costs at the producing Heron-1 well by converting power generation from diesel to grid electricity.

Low-cost testing is also planned for Heron-2, where oil-bearing zones were confirmed in 2024, and for Gazelle-1, which exhibited log data indicative of potential oil pay. The results from Gazelle-1 may help determine whether to proceed with further appraisal.

At Gobi Bear-1, the company intends to test a zone identified by geochemical indicators in 2024. A successful test could support additional resources on Block XX, Petro Matad's main production licence area in eastern Mongolia. According to the company, existing infrastructure at Heron-1 could be used to bring any successful wells into production relatively quickly.

A portion of the capital will also be allocated to SunSteppe Renewable Energy, Petro Matad’s joint venture focused on large-scale renewables. The JV has secured exclusivity for two wind power projects 200 MW and 1.5 GW respectively. Initial activities, such as land lease execution and resource data collection, are scheduled to commence.

The company views its local developer role in these projects as a way to capture development premia when future investors enter the construction phase. Benchmarking from prior projects in Mongolia suggests that projects of this scale could attract multi-million dollar premiums once they reach a ready-to-build status.

Petro Matad also plans to continue early-stage evaluation of Block VII, an underexplored region that may contain extensions of productive basins found in northern China. The company will conduct geochemical studies and fieldwork and seek potential partners for future exploration.

A separate retail offering of up to 62.5 million shares, priced in line with the institutional placing, was launched to give UK retail shareholders a chance to participate. The result of this offer is expected by 16 July 2025.

Admission of the 355,419,117 new shares to AIM is scheduled for 18 July 2025. Following admission, the company’s total share capital will rise to approximately 1.84 billion ordinary shares.

MATD share were trading at 26.09% lower at GBX 0.81 per share on 11 July 2025.