Petro Matad Ltd (MATD.L) Placing, Subscription, Retail Offer & Open Offer

Placing to raise approximately USD$ 10 million by way of Placing, Subscription and Retail Offer of ordinary shares

Open Offer of ordinary shares

Petro Matad Limited (“Petro Matad” or the “Company”) (AIM: MATD), the AIM quoted Mongolian oil company, intends to undertake a fundraising of, in aggregate, approximately USD$ 10 million (gross) by way of a placing (the “Placing”) of, a subscription by a director and shareholder of the Company (the “Subscription” or the “Subscriptions”) for, and an offer on the PrimaryBid platform (the “Retail Offer”) of, new Ordinary Shares (“Placing Shares”, “Subscription Shares” and the “Retail Shares”) at a price of 3.5p (the “Placing Price”) per share.

Petro Matad also intends to raise gross proceeds of up to approximately USD$ 2 million through the issue of approximately 43 million new Ordinary Shares (the “Open Offer Shares”) pursuant to an open offer (the “Open Offer”) to allow Qualifying Shareholders, including those who are not participating in the Placing, to subscribe for new Ordinary Shares at the Placing Price. This is on the basis of 1 Open Offer Share for every 16 Existing Ordinary Shares held by the Qualifying Shareholder at the Record Date. Any Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.

The Retail Offer of new Ordinary Shares to be made by the Company will be made on the PrimaryBid platform at the Placing Price, to provide retail investors in the UK with an opportunity to participate in the fundraise. A separate announcement will be made shortly regarding the Retail Offer and its terms.

The Subscription, the Retail Offer and the Open Offer are conditional on the Placing, but the Placing and the Subscription are not conditional on the Open Offer or the Retail Offer.

The Placing will be effected by way of an accelerated bookbuild (the “Bookbuild”) at the Placing Price. The Bookbuild will open with immediate effect following release of this Announcement. A further announcement confirming the closing of the Bookbuild and the number of new Ordinary Shares to be issued pursuant to the Placing is expected to be made in due course. In the event of excess demand, the Company reserves the right to increase the size of the Fundraising in its sole discretion.

Mike Buck, Chief Executive, has indicated his intention to subscribe for new Ordinary Shares representing up to approximately USD$100,000 at the Placing Price pursuant to the Subscription.

Petrovis, the Company’s largest shareholder, has indicated its intention to subscribe for new Ordinary Shares representing up to approximately USD$2.1 million. at the Placing Price pursuant to the Subscription.

The share issuance in connection with the Placing and Retail Offer is within existing Shareholder authorities granted at the annual general meeting of the Company held in 2020 and therefore no Shareholder approval is required in respect of the Placing and the Retail Offer. The share issuances in connection with the Subscription and Open Offer will require shareholder approval at an Extraordinary General Meeting to be held on or around 5 August 2021.

Petrovis and certain of its concert parties, the Directors, and certain members of the Company’s senior management team have irrevocably undertaken to vote in favour of the Resolutions in respect of their own beneficial holdings of, in aggregate, 186,816,666 Existing Ordinary Shares, in aggregate representing approximately 27.42% of the Existing Ordinary Shares.

Further details of the Subscriptions will be set out in the announcement to be made following closure of the Bookbuild.

As of 7 July 2021, the Company has been granted a fully approved Exploitation Licence for development of the Company’s 100% owned Block XX. The Exploitation Licence covers an area of 218km2 and includes the entirety of the Heron structure on which the Heron 1 oil discovery well was drilled in 2019. The area also includes the nearby Gazelle 1 discovery and prospects and leads mapped within the proven productive Tosun-Uul sub-basin. The net proceeds of the Fundraising will primarily be used to commence production from the Heron Field, with the completion of the Heron 1 well and the drilling of the H2 and H3 wells. Production start-up is anticipated in mid 2022 using nearby processing and export facilities.

The Company intends to publish and send a circular (the “Circular”) to holders of Ordinary Shares (“Shareholders”) in connection with the General Meeting and the Open Offer on or around 19 July 2021. The Circular will also be available on the Company’s website: https://www.petromatadgroup.com/

Mike Buck, CEO of Petro Matad, said:

“Having secured the Exploitation Licence for Block XX we are focused on commencing oil production from the Heron oil discovery, as well as appraising and developing the full potential of the field. With c.190 million barrels of in place resource potential and a low-cost operating environment, Heron has robust development economics with significant near field potential that can add significant value to Petro Matad’s portfolio.

In working with the Ministry of Mining and Heavy Industry to secure the Exploitation Licence, it is clear that we have a strong relationship with the Government and that Mongolia is committed to developing this important discovery for the country.”

The Placing is subject to the terms and conditions set out in the Appendix to this Announcement (which forms part of this Announcement). It is intended that the Retail Shares will be subscribed for on the basis of the terms and conditions of the Retail Offer, rather than pursuant to the terms and conditions of the Placing contained in the Appendix to this Announcement.

The Subscriptions and Open Offer are subject, inter alia, to Shareholder approval of the Resolutions.

Each of the times and dates in this Announcement refer to London time and are subject to change by the Company and/or the Joint Bookrunners. Any such change will be notified to Shareholders by an announcement on a Regulatory Information Service.

A Circular comprising, inter alia, a Notice of Extraordinary General Meeting to be held on or around 5 August 2021 will be sent to Shareholders on or around 19 July 2021 and will thereafter be available on the Company’s website at www.petromatadgroup.com.

Capitalised terms used but not defined in this Announcement shall have the meanings given to such terms in the section headed ‘Definitions’ below save that any capitalised term defined in the Appendix shall have such meaning in the Appendix to the exclusion, in the Appendix only, of any definition of such term elsewhere in this Announcement.

For further information please contact:

Petro Matad Limited

Mike Buck, Chief Executive Officer

+976 7014 1099


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