Petro Matad is to review its exploration assets in Mongolia and assess a
technical path forward possibly through partnerships, it said today.

The company, which recently installed a new management team, added it plans
to revisit the data from last year’s troubled drilling campaign at Davsan
Tolgoi to lower the risks for a drilling campaign planned for 2013.

While this study work is going on, drilling has been suspended for the
remainder of 2012 and drilling and workover rigs have been stood down.

Petro Matad”s PSCs in Blocks XX, IV and V with the government of Mongolia
cover over 60,000 square kilometres and encompass nineteen distinct basinal
areas spread throughout the blocks.

Studies on Block V are scheduled to be completed over the next three months
with seismic over the coming winter months. These studies and field programmes
are all designed to generate the first drilling programme on Block V to take
place in 2013.

Blocks IV and V also contain approximately fourteen known occurrences of oil
shale.  Most have been preliminarily assessed with respect to their
association with conventional petroleum exploration, the company said.  

One, Khoid Ulaan Bulag (KUB) on the southern boundary of Block IV, has the
potential to be a large hydrocarbon source at grades that could be considered
commercial, it added. 

Petro Matad posted losses of US$39.6 mln (2010: US$7 mln) in 2011 and had
cash at the year-end of US$15.5 mln.