Mongolia
Onshore Development and Upside Exploration
Petro Matad Ltd, the London AIM-listed company, has commissioned Envoi to identify a strategic partner to join them in the appraisal and development of two discoveries made in the northern part of their 100% owned and operated Block XX PSC and also wildcat exploration in its operated Block VII PSC located in southern Mongolia, a region virtually unexplored but with proven petroleum systems immediately to the south in China. Situated in the Tamtsag Basin of NE Mongolia, which is historically the most productive part of the country, Block XX lies at the southern end of the basin where Petro Matad successfully discovered oil in their Gazelle-1 and Heron-1 wells in 2019. The Heron well was put on production in October 2024 and produced an average of 161 bopd in 2025* with a low 3% water cut from a closure estimated to contain ~200 MMbo STOIIP. Gazelle-1 was successfully tested and put on production in November 2025 and is producing at ~135 bopd* following initial production optimisation tests. Award of an initial 25 year Exploitation Licence (EL) in July 2021, now restated to 2024, which covers an area of 214 km2 carved out of the original Block XX area, incorporated the partially 3D defined Heron and Gazelle discoveries together with other 2D defined exploration upside. Both Heron-1 and Gazelle-1 require progressive appraisal and development drilling, with water injection and modern completion technologies to fully develop the fields. Oil from both wells is transported to refineries in China via Block XIX facilities (in co-operation with PetroChina who produce the majority of the country’s oil from its Toson Uul field complex immediately north of Block XX). However, once the new Mongol Refinery is completed (operational by 2028) all crude production in Mongolia will, by law, have to be refined there, transported from the Tamtsag area by a near completed pipeline connection. The development of the Heron field is scheduled to progressively unlock the estimated 32 MMbbl (P50) recoverable resource that was independently assessed by Leap Energy in a CPR completed in February 2020. It is expected that modern completion, development and stimulation technologies could further unlock as much as 60 MMbbls (3P) resource potential.
Even though Mongolia is remote, drilling costs and associated facilities are low by comparison with elsewhere in the world and a well can be drilled to ~3,000 m for as little as US$ 2 million dry hole, or stimulated and completed for under US$ 4 million. PetroMatad have installed a 10kV electric powerline to the Heron field production facilities from the grid, reducing daily operating costs, emissions and fuel handling. Scoping economics indicate that a minimum commercial threshold can be achieved in fields as small as 1 MMBO recoverable and at modest commodity prices. Recent valuation has estimated that Heron’s base case resource around the Heron-1 well alone could now generate an NPV10 of around US$ 70 million. With addition of Heron updip upside and Gazelle production this increases to US$ 160 million. These economics are based on long term Brent of US$ 65/bbl oil price.
Petro Matad’s other asset is Block VII, in southern most Mongolia, acquired in January 2025 and is a vast 41,141 km2 virtually unexplored exploration opportunity adjacent to several proven and producing petroleum systems in China some of which clearly extend into the acreage. Data collation, regional and field studies are underway in the Phase 1 exploration term. A material share of Petro Matad’s 100% working interest in the Block XX Exploitation Licence is available in return for funding the planned appraisal and development drilling programme.
*source: RNS 18th February 2026.
