Financial Update
In reference to the announcement of 30 June 2016, the Company is pleased to provide a further financial update.
The announcement of 30 June 2016 stated that the Company's affiliate (Central Asian Petroleum Corporation Limited - "CapCorp") was in continuous discussion with Shell's affiliate company (BG Mongolian Holdings Limited - "BGMH"), in relation to obligations surrounding BGMH's exit from the Block IV and V Production Sharing Contracts (PSCs). The discussion was specifically related to the exit payment.
The Company is pleased to announce that agreement has been reached by the parties. Under the terms of the agreement, Shell's affiliate will pay an exit amount of $10,005,303 as stipulated by the Farmout Agreement and will pay a further $5,000,000 upon completion of the reassignment. This further amount is refundable to Shell's affiliate, should CapCorp secure a partner for any of the two Blocks during the exploration period or any extension of exploration period. Any farmout entered into by CapCorp with a third-party company will be at its discretion. The reassignment of BGMH's 78% working interest back to CapCorp is subject to government consent.
A further announcement will be made in due course.
Commenting, Enkhmaa Davaanyam, Petro Matad Chairperson, said:
"I am very pleased that Shell and Petro Matad were able to conclude this agreement. The cash to be provided by Shell will enable the Company to continue its planned work program culminating in exploration drilling next year.
