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Highlights
Petro Matad Limited secures crude-oil sales framework for Block XX production (MATD)
Agreement ties pricing to Daqing crude benchmarks and outlines monthly invoicing procedures
Collaboration with PetroChina Daqing Tamsag enables monetisation of Heron 1 output from late 2024
The oil and gas exploration sector underpins global energy supply by discovering and delivering hydrocarbon resources. Operators in this domain engage in acreage licensing, drilling programmes and export arrangements to commercialise finds. Petro Matad Limited (LSE:MATD) has advanced its Mongolian operations through a landmark crude-oil sales agreement.
Sales Agreement Scope
The contract with PetroChina Daqing Tamsag addresses all logistical steps for crude from Block XX, including storage, processing, transportation and export. Heron 1 well output produced between the final quarter of last year and the current quarter has been invoiced, with first payments scheduled this month. Formalisation of this agreement unlocks revenue streams by linking field production directly to downstream marketing channels.
Pricing and Billing Framework
Oil pricing under the arrangement is anchored to average Daqing crude quotations, providing a transparent reference for monthly settlements. Petro Matad will issue invoices at the close of each month, with payment to follow during the concluding days of the billing cycle. That structure aligns cash flow timing with market price movements, ensuring consistency in receipt of export proceeds.
Operational Milestones in Mongolia
Execution required co-ordination with Mongolian regulators and facility operators to confirm measurement, quality assurance and customs clearance processes. Key milestones included commissioning of export infrastructure and completion of metering-run agreements. That groundwork permitted uninterrupted loading of Heron 1 volumes onto export tankers, a first for an independent operator in the region.
Strategic Collaboration with PetroChina
Partnering with PetroChina Daqing Tamsag leverages the latter’s downstream network and cargo-lift capabilities. The alliance covers shared responsibilities for handling crude volumes destined for international refineries. Such cooperation builds on historic relationships between Mongolia and China in energy trade, reinforcing supply stability and opening avenues for future field developments.
Market Reception and Equity Impact
Market platforms registered a sharp uptick in Petro Matad’s share valuation following the announcement, reflecting stakeholder approval of a secured sales route. Equity quotations surged by nearly half in London trading, signalling confidence in predictable revenue generation. That shift highlights the market’s emphasis on de-risked production assets coupled with established export pathways.
Next Steps for Block XX
With sales logistics resolved, focus now shifts to reservoir appraisal and drilling-extension plans. Data gathered from export operations will inform field-performance models and guide future workovers. Continued engagement with service providers and engineering teams aims to sustain export consistency and enable expanded throughput from adjacent appraisal targets.
