Petro Matad (AIM:MATD), the AIM-quoted Mongolian oil company, has finally implemented its 2026 Oil Sales Agreement with PetroChina, ending a delay that began despite PetroChina's own approval of the deal in June.
The roughly 48,000-barrel inventory of Block XX production held in tanks at the Block XIX facilities will now be exported and sold, with invoices processed in September.
PetroChina's Ulaanbaatar office has indicated it will try to expedite payment ahead of contractual terms given the length of the hold-up.
Pending that revenue, Petro Matad has rescheduled its planned blockwide 3D seismic survey and well intervention work at Heron-2 and Gobi Bear-1, despite having already completed preparations and permitting, in what it calls a prudent cash management step.
Five companies, mostly Asian and Chinese, remain active in the farm-out data room covering Blocks XX and VII, with interest heightened by disruption to oil supply routes into Asia stemming from events in the Gulf.
The company still targets a farm-out deal within the year.
Its renewable energy joint venture, SunSteppe Renewable Energy, has secured exclusivity on three projects totalling 290 MW, including two fast-tracked by the Mongolian government with feasibility studies and construction licences already approved.
SRE also plans to join a consortium bidding for a 100 MW wind project managed by the International Finance Corporation.
"We finally have an agreed and now implemented 2026 Oil Sales Agreement after seven months of effort and delay," said chief executive Mike Buck, adding that the company is "also pushing to have an approved agreement for 2027 in hand."
Power purchase agreement talks on the two fast-tracked solar projects are targeted for completion in the third quarter.
News Intelligence what this means for the company
Petro Matad has finally activated its 2026 PetroChina sales agreement after a seven-month delay that began despite PetroChina's June approval, unlocking export and payment for ~48,000 barrels held in storage. The company is deferring planned seismic and well work until cash arrives, a liquidity-driven pause that underscores its dependence on this single revenue event to fund near-term operations.
The resolution removes a near-term execution risk and signals PetroChina's willingness to expedite payment, but the company remains cash-constrained enough to postpone prepared work. Success now hinges on actual payment timing and the farm-out deal targeted within the year; without either, operational momentum stalls.
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