Exciting start to 2025

Petro Matad has released a positive operational update this morning. The company has seen solid production from its Heron-1 well, which continues to flow to surface without the need for pumping. The negotiations on cooperation, which covers the processing and sale of crude produced at the Heron field, are now complete and awaiting sign-off. This will allow Petro Matad to sell the crude produced, including the current oil in storage. Additionally, Petro Matad has been officially awarded a new exploration licence, Borzon Block VII, and hopes to obtain a further licence soon. 2025 appears to have started well for Petro Matad, and its shareholders.

Exciting start to 2025

A happier year should lay ahead for Petro Matad in 2025. After numerous bureaucratic delays, in October 2024 the company managed to start production at the Heron oil field, onshore Mongolia, which allows it to start generating cash flow. This cash will be utilised to build up production at the Heron field and to invest in further exploration and its exciting renewables portfolio, all of which should deliver growth in shareholder value.

On the way up in 2025

After many delays and setbacks, Petro Matad has announced that it is ready to start production at the Heron-1 well pad in Mongolia on or before 25 October. This is exciting news as it will allow the company to start generating cash flow, which can be utilised to ramp up production at the Heron oil field and invest in its other businesses, and hence start building significant shareholder value.

Heron – preparing the bunting

Petro Matad has issued an update this morning. The group has seen progress at the Heron field, with MIMR (Ministry of Industry and Mineral Resources) and MCUD (Ministry of Construction and Urban Development) agreeing to reclassify the well pads so that they do not require permitting. This has allowed the start of construction of the facilities at the Heron-1 well, which should allow production to start in October. Preparations to test the Heron-2 well are underway. The Gobi Bear exploration well has been drilled with some positive signs and will be analysed before assessing the forward programme. Momentum is clearly building in the Mongolian operations and Petro Matad is moving closer to generating cash flows.

Progress on Heron, pause at Gobi Bear

Petro Matad has announced that the Heron-2 well has reached TD (total depth) and wireline logging has been completed. The well encountered the primary target on prognosis and initial logs have identified oil and gas shows. This well will now be tested with the hope that it could be onstream before the winter operational shutdown in late November. This is good news for Petro Matad in that the well was drilled ahead of schedule and moves the company closer to ramping up production at the Heron field, and to generating increasing cash flow.

Heron-2 encouragement

Petro Matad has this morning released its interim results and an operational update on the Heron-1 well. The interims are of minor import as the news has been covered over the year to date. However, on Heron-1, Petro Matad has encountered some delays in getting a permit to install long-term production facilities. This is not a major setback as the company will use temporary facilities in the short-term. The company has also reached an agreement in principle to sell and export through the facilities in the adjacent block XIX. This should allow production to start in October.

Interims and Heron update

Petro Matad has issued an operational update this morning. The Heron-1 well has been re-entered and management is looking to put in the required production equipment. PetroChina, in the neighbouring licence, is providing oil storage tanks for the production. Petro Matad is also looking at mobilising rigs to start drilling the Heron-2 well and Gobi Bear exploration well. This is exciting news. After many delays, the group is about to start production, which will provide cash flow and accelerate the growth of shareholder value.

Preparations for production gather pace

Petro Matad has announced that it is has completed a capital raising providing gross proceeds of approximately US$9m. On top of the US$4.5m cash at the year-end, this will give Petro Matad sufficient funds to grow the business. The immediate task will be to commence the development of the Heron Oil discovery, which will allow the group to start generating cash flows. Management will also look to drill the high-impact Gobi-Bear prospect and invest in its developing renewables business. We believe that this fundraise will allow management to grow the business at a faster rate than we had originally expected, potentially adding significant value for shareholders.

Placing to fund operational growth

Petro Matad released an operational update on 29 May. The key message is that local approvals for land rights have been approved to allow the 2024 operational programme to start. This will allow Petro Matad to move ahead with the initial development of the Heron oil discovery. Management is in discussions with DQE, the leading oil service provider, to mobilise a completion crew to the Heron-1 well. Although Mongolia’s parliamentary elections could cause a delay, it is hoped that the crew will be on site in the next month. This is good news for Petro Matad and its shareholders as it will allow the company to complete the Heron-1 oil discovery well as a producer and be in a position to start generating cash flow.

Local approvals received – ready to roll

Petro Matad provided an operational update on 25 April. The company continues to be frustrated in its attempts to get central government to complete the certification process confirming the exploitation area for Block XX as State Special Purpose Land. However, local government approval shows signs of being attainable and would allow the company to start work on completing Heron-1 as a producing well. Petro Matad also announced that its renewables joint venture, SunSteppe Renewable Energy (SRE), is making good progress on two exciting new projects that could have a significant impact on earnings.

Renewables JV excites as frustrations persist

Hydrogen Utopia (HUI) has re-agreed terms for a 50/50 joint venture with Powerhouse Energy Group (PHE) for the development of a waste plastics to hydrogen plant at a facility in County Longford in the Republic of Ireland. The Longford Project JV was originally agreed in March 2023. This new agreement is an important step for HUI towards getting its first plant up and running, with the combined skillsets of the companies helping to bring this project to fruition. Separately, HUI has recently provided updates on initial sales at Ohrid Organics and an exciting potential acquisition of a bio-fuels business.

Longford Project joint venture re-energised

Petro Matad, the Mongolia-focused E&P company, has announced that its application for land access for 2024 operations has been approved by the Matad District Committee. This means that a land use agreement can be prepared, which, once signed, will allow operations to proceed, including the completion of the Heron-1 discovery well as an oil production well. This will allow Petro Matad to start generating cash flow that can be used to grow the business and add shareholder value. Although this is a step forward, the company still faces a delay to the State Special Purpose Certification process.