Image source: © 2025 Krish Capital Pty.Ltd

Highlights

  • Petro Matad (AIM: MATD) posted 1H 2025 loss of USD 1.7M, down from USD 2.56M in 1H 2024.
  • Heron-1 well in Block XX began production in Oct 2024, averaging 165 bopd with 3% water cut.
  • Mid-year equity raise generated GBP 3M (c. USD 4.2mn) to fund well testing and renewable projects.

Petro Matad (LSE:MATD) is a Mongolian oil exploration and production company. It holds 100% interest and operatorship of Matad Block XX (214 sq km) and Borzon Block VII (41,141 sq km).

Financial Results
Petro Matad Limited, the AIM-listed Mongolian oil company, released its unaudited interim results for the six months ended 30 June 2025. The Group reported a loss of USD 1.7M for 1H 2025, compared to USD 2.56M in the same period of 2024. Cash and financial assets totaled USD 2.37M at 30 June 2025, including USD 1.7M in cash and USD 0.67M in financial assets, up from USD 1.93M a year earlier.

Production and Revenue
Production commenced from the Heron-1 well in Block XX, eastern Mongolia, in October 2024. Average production during 1H 2025 was 165 barrels of oil per day (bopd) with a 3% water cut. Net revenue from production up to the end of April 2025 was USD 0.81M, with an average realised price of USD 62.9/bbl. Payments for May, June, and July production totaling USD 0.33M were received post-period, though PetroChina has applied a 30% withholding pending amendment of the oil sales agreement.

Operational Developments
Petro Matad advanced discussions with a potential farm-in partner for Block XX, reaching detailed technical and commercial negotiations. A new Exploration and Production Sharing Contract (PSC) was signed for Block VII. The Company also expanded its renewable energy efforts via Sunsteppe, signing an exclusive agreement to develop a 200MW hybrid wind and solar project.

Capital Raising
The Company completed a mid-year equity raise, issuing new shares for gross proceeds of GBP 3M (c. USD 4.2M). Funds are allocated to reduce Heron-1 operating costs by switching from diesel to grid electricity, conduct well testing in Block XX, and develop renewable energy projects.

Outlook and Activities
Work is underway to increase Block XX production, including retesting Heron-2 and testing Gazelle-1 and Gobi Bear-1 wells. The Heron-1 site is being connected to the national electricity grid, targeting a 15% reduction in operating expenses. Sunsteppe’s 200MW hybrid project and a larger 1.5GW renewable project are in preparation.

Management Comment
Mike Buck, CEO, said: "The start up of production in Block XX in 2024 took far too long but we are delighted to have finally achieved it and now to be receiving oil sales revenue for the first time in the Company's history. Over the last few months we have prioritised our efforts to remove PetroChina's withholding of 30% of our sales revenue and after the recent meeting with PetroChina we are hopeful that this matter will soon be resolved.

In the field we are working hard to complete our 2025 well test programme and at the same time, our renewables joint venture is growing into a potentially very valuable part of our business.

I would like to thank the entire Petro Matad and Sunsteppe teams for their continued efforts. We are particularly pleased to see our oil production crew working so well at Heron-1. All members of the team are Mongolian and most were hired from the communities in the area of our operations."