Petro Matad Hits Record Oil Output in November, Moves Forward on Key Sales Agreement

Petro Matad Limited (AIM: MATD) marked a milestone last month by achieving its highest ever oil production, powered by its recently operational Gazelle-1 well. November saw the company's output surge, with Gazelle-1 contributing 200 barrels per day after some early teething problems.

Meanwhile, the Heron-1 well continues to perform steadily and within expectations, notably free from any water contamination issues that can plague oil extraction. Together, these two wells are underpinning what the company describes as reliable operations and solid export activity as winter approaches.

The energy player is also close to finalizing a critical revision of its Oil Sales Agreement with PetroChina. The updated contract aims to eliminate partial revenue withholding and secure payments previously held back, with only a minor tax issue related to processing fees outstanding. This fresh deal is set to replace the 2025 terms with a new 2026 agreement incorporating these amendments.

On the exploration front, Petro Matad has drawn interest from external parties for its Block XX project, hosting due diligence tours in Mongolia recently. Discussions are ongoing, with the company entertaining proposals from two additional potential partners. Concurrently, it's advancing studies and fieldwork on Block VII, focusing its farm-in partner search on operators active in northern China, near that block's border.

Renewable energy is on the horizon too. Through its SunSteppe Renewable Energy joint venture, the company is developing a 200MW hybrid renewable project in Mongolia's Tuv Province. The first phase targets 100MW of solar PV ready by late 2026, with a second phase planned to add 100MW of wind power potentially by 2028.

Additionally, Petro Matad is spearheading Mongolia's inaugural green hydrogen initiative, collaborating with the Oyu Tolgoi copper mine. Initial plans include a modest 3MW electrolyser capacity that will expand to a 24MW hybrid wind-solar plant, supporting a shift toward cleaner industrial energy.

Further, the company is working on a 50MW battery energy storage system in Choir, highlighted by an MoU with ZTT International, which enhances its punch for upcoming government auctions tied to renewable projects.

CEO Mike Buck summed up the progress with a nod to the recent output record: "Gazelle-1, our second producer, coming online has propelled us to Petro Matad's most productive month ever. Establishing robust operations and exports ahead of winter was a big win for us." It's a solid operational checkpoint as Petro Matad continues to expand its footprint both in oil production and clean energy initiatives.