New Risk • May 28
New major risk - Revenue and earnings growth Earnings have declined by 13% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Share price has been highly volatile over the past 3 months (22% average weekly change). Earnings have declined by 13% per year over the past 5 years. Minor Risks Latest financial reports are more than 6 months old (reported June 2025 fiscal period end). Shareholders have been diluted in the past year (25% increase in shares outstanding). Revenue is less than US$5m (US$2.0m revenue). Market cap is less than US$100m (€26.0m market cap, or US$30.3m). Announcement • May 28
Petro Matad Limited Provides Operational Update on Oil Production and Renewable Energy Projects Petro Matad Limited reported that all issues outstanding with the 2025 Oil Sales Agreement were resolved and payments were made. In subsequent discussions with industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), with Block XIX operator PetroChina and with the General Tax Authority of Mongolia, a common understanding was reached on the best way to word the 2026 Oil Sales Agreement to align it with the Petroleum Law and tax legislation. Although PetroChina Mongolia approved the new agreement, approval stalled in their headquarters as their Compliance Department sought an amendment to PetroChina's contract with the refinery to incorporate wording relating to Block XX crude. However, the issue has been resolved and the approval process will be completed shortly. With Block XX production accumulating in the Block XIX storage tanks and with a rising oil price through 2026, Petro Matad was prepared to give PetroChina time to resolve its issues as the delay in selling the year's production to date, which totals approximately 35,000 barrels, gives the Company the chance to secure a substantially higher price per barrel than had the oil already been sold month by month through the year. In parallel, Petro Matad approached Chinese oil traders to set up an independent route to market in case the delay continued. Interest was shown and this remains an option, but with PetroChina's approval now expected, the tried and trusted export operation remains the strong preference. Heron-1 continues to perform as forecast with average oil production from the well of 126 barrels per day through the first quarter. The water cut remains low and stable at approximately 3%. The gradual decline in the oil rate is in line with the production characteristics of the basin. The approved plan of development for Heron includes water injection wells later in the field life to support reservoir pressure and improve recovery per well and increase the overall recovery factor from the field. Gazelle-1 production has been optimised and the water cut has stabilised at approximately 20% with daily oil production averaging 123 barrels which is greater than the initial forecast when water breakthrough was first detected. Since Gazelle-1 came on stream in November 2025, Block XX operating costs have not increased above the level they were at when only Heron-1 was in production. This has been achieved as a result of the savings in power generation realised after connecting Heron-1 to the national electrical power grid. With Gazelle-1 performing above expectation, the economics of connecting this well to the transmission line at Heron-1 are being considered. Production operations are continuing to run smoothly with excellent cooperation in the field between the Petro Matad and PetroChina teams. 2026 production to date totals approximately 35,000 barrels of crude and Block XX production since start up now exceeds 110,000 barrels. The Company has received a technically and commercially attractive offer from the seismic acquisition contractor with the most experience in Mongolia to conduct a high resolution 3D seismic survey over the Block XX exploitation area. The proposal is being urgently evaluated as the crew is available to begin in late June or early July. With existing 3D covering the northern portions of both the Heron and Gazelle fields but not the southerly up dip culminations of these traps, 3D seismic will provide the structural definition required to drill future appraisal, development and exploration wells. New data should also improve seismic resolution at the reservoir level compared to that provided by the existing 2D and 3D surveys which were all acquired more than 15 years ago. On well work for 2026, whilst Heron-1 and Gazelle-1 are still performing at or above forecast, no workover activities on these wells will be undertaken at this time. Petro Matad is in discussion with a specialist company with the capability to workover the Heron-2 well to see if it can improve the flow potential of the reservoir at this location. Feedback from the well test contractor is awaited to secure a cost effective proposal for the testing of the Gobi Bear-1 well. SunSteppe Renewable Energy (SRE)'s operational focus in 2026 remains on its 200MW hybrid wind, solar, and battery energy storage project in Tuv Province. Changes at Cabinet level in the Mongolian government in recent months have slowed the Ministry of Energy's evaluation of the feasibility study for the project and its Science and Technology Committee has yet to meet to review and approve it. Work at site to gather wind data continues. SRE is part of a short-listed consortium that has submitted a bid for a 90MW solar/battery project for Ulaanbaatar city. SRE has also submitted an expression of interest on a 100MW wind/battery project being managed on behalf of the government by the International Finance Corporation. In addition to these two projects, SRE is assessing the potential of another 100MW utility scale solar/battery project under the government's broader efforts to improve winter power supply reliability. The government needs larger scale battery storage projects online this winter and will expedite all necessary approvals to achieve that goal. SRE has had positive discussions with potential financing institutions, construction contractors and strategic partners regarding possible participation. Board Change • May 20
Less than half of directors are independent No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 1 experienced director. 3 highly experienced directors. 1 independent director (3 non-independent directors). Independent Non-Executive Director Tim Bushell was the last independent director to join the board, commencing their role in 2017. The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Insufficient board refreshment. 
