Operational Update – Spud of Heron-2

9^th September 2024

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY PETRO MATAD LIMITED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Petro Matad Limited

("Petro Matad" or the "Company")

Operational Update - Spud of Heron-2

Petro Matad Limited ("Petro Matad" or "the Company"), the AIM quoted Mongolian oil company, provides the following operational update.

Spud of the Heron-2 Development Well

Petro Matad is pleased to announce that on 8^th September it spudded the Heron-2 development well in the Tamsag Basin of eastern Mongolia. This is the first development well to be drilled on the Petro Matad operated Heron Field, which has total oil in place potential of c. 190 million barrels and which was discovered when the Heron-1 well was drilled and tested in 2019.

Heron-2 is being drilled by the DQE International rig 40106 and is located c. 800m south of the original Heron discovery well. It is targeting the same reservoir units of the Cretaceous Lower Tsagaantsav Formation that were proven productive in Heron-1. Heron-1 flowed at a maximum rate of 821 barrels of oil per day on test from a 12m interval between 2,834m and 2,846m in an overall oil column of some 70m. This was the third best test rate ever recorded in Mongolia. Heron-2 has been located to investigate the extension of the productive reservoir zone seen in the discovery well and will be drilled to a total depth (TD) of c. 2,900m. The reservoir is expected to be encountered at a similar depth to that in Heron-1 based on interpretation of the high quality 3D seismic data covering this portion of the Heron structure.

Drilling to TD is expected to take about 30 days following which wireline logging will be conducted to evaluate the productive potential of the reservoir. A well test and stimulation programme are planned to be executed during the 2024 operational season. If successful, Heron-2 will be put on stream in either late 2024, if time permits, or in Q2 2025 after the winter operational shut down.

Gobi Bear-1 Well Preparations

Mobilisation activities for the Gobi Bear-1 exploration well are underway with anticipated spud by mid-September. A separate update will be issued in due course.

Heron-1 surface equipment installation and preparations for production

The construction permit for the installation of production facilities at Heron-1 is at the final stage of the approval process. The construction contractor is ready to mobilise. The paperwork for the construction permit for Heron-2 is also being progressed whilst, in parallel, the Company has proposed a streamlined approval process to the Ministry of Construction to reduce the bureaucracy for the construction of oil production well pads.

Negotiations with PetroChina and industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), on processing, transport and sales of Block XX production are progressing and Petro Matad has been invited by PetroChina to meet at its Block XIX facilities to review the logistical options.

Mike Buck, CEO of Petro Matad, said:

"After a lot of effort from our staff and considerable patience from our shareholders, we are very pleased to have spudded the Heron-2 development well and we look forward to Gobi Bear-1 following soon. We are encouraged by the progress of discussions on cooperation with PetroChina and we are pushing for the final approval on the Heron-1 construction permit which we don't expect to take much longer." 

Further updates will be provided as the 2024 work programme progresses.

- Ends -

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Technical information in this news release has been reviewed by the Company's Technical Manager, Mr. Jerry Smart. He has over 40 years of industry experience in oil and gas exploration and production with LASMO, Eni, Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's College, London.

About Petro Matad

Petro Matad is the parent company of a group focused on oil exploration, development and production in Mongolia. Currently, Petro Matad holds 100% working interest and the operatorship of the Matad Block XX Production Sharing Contract with the government of Mongolia. Block XX has an area of 214 square kilometres in the far eastern part of the country.

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.