Petro Matad shares rose on Monday after the Mongolia-focused energy company outlined production payment terms that will generate regular revenue from May.
Petro Matad has announced the signing of an Oil Sales Agreement with PetroChina Daqing Tamsag for Block XX crude oil production, which lays the foundations for steady cash flows that can help support additional exploration and optimisation of their Mongolian assets.
The agreement, signed today, covers the storage, processing, transport and export of crude oil from Block XX. PetroChina Daqing Tamsag operates the neighbouring Block XIX.
Petro Matad has submitted invoices for production from the Heron 1 well covering the period from October 24, 2024, to March 31, 2025. These invoices will be processed for payment during May 2025.
Going forward, Petro Matad will submit monthly invoices by the tenth day of the subsequent month. Payments will be made during the last week of each month, based on the average benchmarked price of Daqing crude oil for the production month.
Custody transfer of Block XX oil occurs at the Block XIX processing facilities. PetroChina will handle all processing, transport, and export of the crude oil to buyers in China.
“We are delighted to have signed the oil sales agreement for the commercialisation of Block XX production. This involved a number of firsts for Mongolia and whilst the process was slow, we are grateful to the Mongolian authorities and to PetroChina for their support,” said Mike Buck, CEO of Petro Matad.
“We look forward to establishing a cooperative routine in the sales process in the same way that the field crews in Blocks XIX and XX have done in the production operations over the last 6 months and to receiving payment for all the oil produced to date during the month of May.”