Petro Matad Limited, the AIM quoted Mongolian oil company, provides the following operational update and announces the year-end 2020 retirement of John Henriksen who has served the Company as an Executive Director and Chief Financial Officer since 2012.

Block XX Exploitation Licence

The Block XX Exploitation Licence (EL) application remains with the Ministry of Mining and Heavy Industry (MMHI) awaiting the convening of the meeting of the Mineral Resource Professional Council (MRPC) to review and approve the Heron reserves report. This meeting has been delayed due to a reorganisation within MMHI which followed Mongolia's parliamentary elections in Q2. We understand that whilst the nominees for the Petroleum Subcommittee - which will review the Heron reserves report - have been finalized, the full membership of other subcommittees has yet to be confirmed which is causing a delay in  ratification.

This has resulted in an unavoidable delay for the Company in progressing the EL application, as we had anticipated that the MRPC would have concluded its review of the Heron reserves report before the end of September. We have been advised that the ministerial ratification of the MRPC is imminent and review of the reserves report is included as a matter of urgency on the MRPC agenda. We continue to work closely with the MMHI to overcome this delay, meet the MRPC and secure the approval of the reserves report to allow us to progress to the remaining stages of the approval process.

As previously advised, once the reserves report has been approved, the EL award process requires the development area to be agreed with industry regulator Mineral Resources and Petroleum Authority of Mongolia (MRPAM) and the Plan of Development must be reviewed and approved by MRPAM and MMHI/MRPC. The Plan of Development is ready for submission to the relevant bodies as soon as the reserves report approval is in hand.

Detailed Environmental Impact Assessment

The Company has had its Detailed Environmental Impact Assessment (DEIA) for the Heron Development approved by the Ministry of Environment. This is a major milestone as the field work, documentation and local community engagement requirements in the preparation of the DEIA are significant and time consuming. An approved DEIA is one of the documents required to get the final ministerial sign off on the EL approval. Securing the DEIA approval whilst countrywide Covid-19 restrictions have remained in force was achieved with the cooperation of central and local government bodies and with the hard work of the Company's HSSE and Community Relations departments.

The assay of Heron 1 oil has also been completed and the results are now under review. Overall, and as expected, the assay has demonstrated that the oil from Heron 1 is very similar to the oil produced in the neighbouring Blocks XIX and XXI. Heron 1 oil is a light, sweet, waxy crude with an API gravity of 44o making it one of the lightest oils found to date in the Tamtsag basin.

Retirement of Chief Financial Officer

The Company is today also announcing the retirement of John Henriksen who has served the Company as Executive Director and Chief Financial Officer since late 2012. Mr. Henriksen's retirement will be effective as of 31 December 2020 until which time he will continue to serve in his current capacity.

Effective 1 January 2021 and until the appointment of a new Chief Financial Officer, Tamir Battogtokh, who has been the Company's Chief Accountant since 2010 will take on the responsibility to manage the finance function within the Company and to ensure the maintenance of the Company's financial controls and governance processes. Mr. Henriksen recently returned to Mongolia and will be working from our head office in Ulaanbaatar to oversee this transition within the finance department. Whilst the board is fully confident that Ms. Battogtokh has the required skills and knowledge to successfully discharge the added responsibilities, Mr. Henriksen has agreed to provide support as may be required throughout 2021.

Petro Matad thanks Mr. Henriksen for his years of service to the Company and wishes him well in his retirement.

Mike Buck, CEO of Petro Matad said:
"Whilst the delay in progressing the Block XX Exploitation Licence application has been unfortunate, we are doing all we can to support the authorities to expedite the MRPC meeting and we have completed all the necessary preparations to be ready for the subsequent phases of the approval process.

Meanwhile, securing the approval of the DEIA is a major achievement and we are pleased to have this in hand. We also continue to carefully manage our cash resources whilst we pursue the permits we need while investigating various funding options for our future operations.

With regard to the retirement of our long-serving CFO, I am honoured to have had the opportunity to work with John Henriksen during the course of our careers. He is a consummate professional and a pleasure to work with. He will be missed by all his colleagues and friends in Petro Matad and we wish him all the best in his retirement."

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