Petro Matad Limited

('Petro Matad' or the 'Company' or the 'Group')

Operational Update

LONDON, 1 March 2024: Petro Matad Limited, the AIM quoted Mongolian oil company provides the following operational update.

Key Company Updates

· The Company has had its application for land access for 2024 operations approved by the Matad District Committee. A land use agreement is now being prepared which, once signed, will allow 2024 operations to go ahead commencing with completion operations on the Heron 1 well.

· The Company continues to push the Government to complete the regulatory formalities to confirm Block XX as State Special Purpose Land and understands and shares the frustration felt by shareholders. The continued refusal of the Provincial Governor to sign off on a Tripartite Agreement which has already been approved by the Ministry of Mining and Heavy Industry (MMHI) and the Central Land Agency has been raised by the Company with all relevant agencies and also at the highest levels in the Mongolian Government.

· Petro Matad is pleased to be the chosen contractor for the two areas for which it submitted applications in the 2022/23 Exploration Tender Round. The award of new acreage is now expected to be made after the 2024 Mongolian Parliamentary elections in the middle of this year.

Operational Update

Block XX local level land use approval: In light of the ongoing delays in the completion of the process by which the Company's Exploitation Area is being confirmed as State Special Purpose Land, the Company has engaged with the District authorities to secure local level approval of land usage. At a meeting of the Matad Citizens' Representatives Committee at the end of February the Company's application for land use in 2024 was approved. This approval covers all the areas in which the Company wishes to operate during the year. The approval means that the land use agreement can now be prepared and signed by the District authorities and by the Company and it will allow our planned operational activities to go ahead whilst the Special Purpose Certification process is completed. We are hopeful that the Provincial authorities, who are holding up the Special Purpose Certification of the Exploitation Area, will not disrupt in any way the District's approval process, but we remain vigilant.

The Company is now stepping up the planning for operations to complete the Heron 1 well for production once the contractors re-mobilise after the winter hiatus and as soon as they can make available their crews and equipment. Discussions with PetroChina for transport, processing, storage, export and sale of the Company's early production are also ongoing.

State Special Purpose Certification process status: A number of regulatory steps were required to be completed by the Government covering the granting and management of State Special Purpose Land. As reported previously, a key part of this is a Tripartite Agreement between the Central Land Agency, MMHI and the Governor of Dornod Province. The Governor is still withholding his signature, now on the basis of a partial overlap of the Block XX Exploitation Area with a provincial Protected Area as he claims it breaches the principle of no overlaps in areas for specific land use.

The Block XX PSC was signed in 2006 and the provincial Protected Area was not declared by the province until 2014, so it is the province that is in beach of the no overlap principle. Furthermore, the Land Law allows the central Government to take such land for State Special Purpose use, so this overlap should not be an obstruction to the certification process. Heron 1 and the other locations that the Company wishes to work on in 2024 are not within the overlapped area.

The Company has raised this issue formally with government agencies and ministers including: the Mineral Resources and Petroleum Authority of Mongolia, MMHI, Ministry of Economic Development, Central Land Agency, Deputy Prime Minister, Prime Minister and the President.

The Government needs to complete this process and Petro Matad is pushing hard for this to be done.

New acreage: As previously reported, the Company was selected as the preferred contractor for the two blocks for which it submitted applications. Despite setting an aggressive timetable for completion of the negotiations and award of the Production Sharing Contracts, the government is now not expected to make the awards until after the 2024 parliamentary elections which take place in the middle of this year. This new timeframe is not critical as the Company intends to focus all of its operational activity on Block XX in 2024.

Mike Buck, CEO of Petro Matad, said:

"We are very pleased that Matad Soum has approved our application for 2024 land access and we are following up as a matter of priority to finalise and sign the land use agreement. With that being said, we are extremely frustrated with the continued delay to the State Special Purpose Certification process and we continue to push to get this resolved.

The diligent efforts of our Government and Community Relations teams have facilitated this progress on land access and we are grateful to the Matad Citizens' Representatives Committee for its favourable hearing of our application and for its approval."

Further operational updates will be provided in due course.

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About Petro Matad

Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds 100% working interest and the operatorship of two Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 214 square kilometres in the far eastern part of the country and Block V has an area of 7,937 square kilometres in the central western 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.