Petro Matad clinches financing deal, prepares drilling campaign

Since financial year-end on 31 December 2016, the outfit clinched a deal with Bergen group by which it provide up to $43.2m through staged private placements over 15 months, together with a $2.0m convertible loan note.

The proceeds would enable Petro Matad to continue with planned work programs including exploration drilling, the company said in an update on its current situation alongside its full-year 2016 numbers.

Also since year-end, it was the sole owner of Blocks IV and V in Mongolia, following the exit of a Shell affiliate.

A deal was also inked in May 2017 with Chinese oil major Sinopec for a rig for the 2017 drilling campaign.

Furthermore, in June 2017 the company received a 2-year product sharing contract extensions from MRPAM for Blocks IV and V.

Net profit for 2016 rose to $10.9m versus a loss of $0.19m the year before, the company said.

The AIM company possessed the largest fully licensed accumulative acreage in Mongolia, as compared to other operators and its stated aim included pursuing "new opportunities2 in the oil sector of Mongolia and to participate in the exploration and development of those areas

In the past, the group had received investment from major investors, such as, the European Bank for Reconstruction and Development in 2009 and later again in 2010, which invested a total of $13m in Petro Matad.

Its largest shareholder was Petrovis, the largest importer and distributor of petroleum products in Mongolia, however, no dividends were paid or proposed in respect of the year 2016 and neither was provided in the year before.

At year-end, the group's cash position was $6.48m but it had since improved to $11.18m following the first tranches of funds from Bergen and the deal with the Shell Afilliate.