Petro Matad (LSE:MATD) — Investor Presentation

0:00 Good morning and welcome to the PETRO MATAD Limited Investor Presentation. Throughout the quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Mike Buck, CEO. Good morning to you, sir.

0:29 Good morning, and good morning all. Thank you very much for your attendance today on the Investor Meet company platform. My name is Mike Buck. I'm the CEO of PETRO MATAD. And joining me for this presentation and q and a session will be, Zula, the CEO of our renewables joint venture, Geralt Tort, who is the executive director of our Mongolian companies, and Jerry Smart, who is our, technical manager for for PETRO MATAD. What I'll do is I will run through the presentation. I'll start off and then hand over to other members of the team as as we get to debits, and then we'll break for q and a at the end. We've had a large number of questions submitted prior to the meeting, so thank you all who took the time to do that.

1:17 And we'll be taking live questions as as time permits, and we'll answer all of the questions that we can. So this is gonna be an update for you all on our operations in Mongolia. Basically, the headlines are production starting, near field exploration to be conducted, and renewable energy update. I'll skip through the disclaimer and take that as read, hopefully. So a little bit about the company. I'm I'm hoping that many of you are fully aware of what we do. But for those that may be new, we call ourselves Mongolia's leading independent energy company. We are AIM listed and have been since 2008. We currently have two PSCs with the government of Mongolia, both of which are a 100% working interest and we operate.

2:09 We have block 20 in the East, which I'll show in a map in a second. And for that block, we now have an exploitation license to allow the development of the discovery we made in 2019. That's only the third ever exploitation license awarded in Mongolia. We have two new PSCs that are pending award, and we'll say a little bit about that too. What we're looking to do in the immediate future is transition from what has been pure exploration history of the of the company into oil production, revenue generation, and into renewable energy where Mongolia offers a large amount of potential for itself and for the surrounding countries.

2:55 And we are focusing on the development of the Heron oil discovery in block 20, and we have two, renewable energy projects in hand that we'll tell you about. The company's been in operation in Mongolia since 2006. We have very strong relationships with the government. We have a lot of in country experience, an excellent database. We've been a highly active exploration production company for many, many years, and now I think our history as a renewable energy, company, although shorter, shows that we're active and agile. In terms of where our assets are located, over in the east on this map, you can see Block 20, and that's picked out in the inset.

3:42 The pink colored area is our exploitation license, which is the remaining part of what was a large exploration block. And you can see immediately to the north of that, a a large number of green blobs. That is PETRO China operated fields in Mongolia, which is the home to about 96% of the country's entire, oil production. And, we are hoping to get our operation up and running using nearby facilities, owned and operated by PETRO China, and we'll tell you about our negotiations that are going on with, with them.

4:21 The Heron Field is scheduled for start up in 2024 now that we have got land access, which many of you will know has been delaying our operation for the last few years, but Gerald Todd will tell you how we have found at least a workaround for that whilst the final certification of our area gives us the long term tenure that, we will be able to exploit. I mentioned we have two new PSCs pending. They're not shown on this map as we haven't been awarded them yet, but we have been confirmed that we are the chosen contractor for the two areas that we applied for. These, as Mongolian blocks always are, are very large. And this time, in choosing the areas, we have chosen not to go for the rank wildcat areas that we had previously in, our blocks four and five.

5:14 You can see on the map in in purple in the middle of the map where Block 5 is located. That is an exploration area that will shortly be handed back to the government as it is reaching the end of its explore expiration period. We've gone for new areas where across the border in China, there is proven production of oil. So we're it's not the wildcatting that we have done previously, but as the blocks are very large, they they do offer very, very large potential. So we're quite excited to get those. We're not expecting them to be signed, though, until late twenty twenty four or maybe early twenty twenty five. The reason for that is that the, government's process for issuing these new blocks became a little bit bogged down over the last six months, let's say, because Mongolia had a parliamentary election which culminated, last Friday in voting and the installation of a new government that is now in place, and we're expecting that as soon as that gets up and running, these processes that have been perhaps held up for during the campaign will move forward.

6:23 I mentioned the issue of block five there. We've been unfortunately unsuccessful in our exploration efforts there, but all commitments are fulfilled. We'll be handing that block back to the government in in good order. The map does show the location of two renewable energy projects that we've been able to, get exclusivity on.

6:44 One is an off grid, wind farm to supply green hydrogen to the major Oyu Tolgoi mine. That is the more southerly of the two, blobs shown on the map. And the other one, the one closer to Ulaanbaatar, is a 50 megawatt battery energy storage system project that has significant scope for upsizing. Both of these projects could be revenue generating as soon as 2025. So given that we only formed our renewable joint venture in the early part of last year, we're very, very pleased with the progress that they have made and very, very pleased with the, support and activity that is coming from the Mongolian government on the energy transition. So just before I hand over to Jerry to tell you about, our activities in Block 20 that we are planning, a little bit of an update on the Mongolian oil industry. The top chart on on this slide shows you the Mongolian daily crude production over a number of years, actually, since 2009.

7:48 You can see an increase in production up to just about 23,000 barrels a day by 2015 since when production has been in decline. Now as PETRO China produces 96% of the country's crude, this is effectively PETRO China's production chart, and that decline starting in 2015 is the natural decline of the fields that they produce immediately to the north of our area. Those fields have been in production since the late nineteen nineties, and this is natural decline. The pandemic years of 2020, 2021, and 2022 because China decided to have an extra year of pandemic compared to the rest of the world. Obviously, there was an impact from the pandemic on production levels. 2023 saw a bit of a rebound.

8:37 2024 is a little bit lower than 2023, as currently forecast. PETRO China's got a few issues with the, the Mongolian government that it's, hopefully going to be sorting out now the new government is in place. But overall, I think the important part of this chart shows the the current production and the horizontal red line at 30,000 barrels a day is the throughput required, the domestic production required to meet the needs of a Mongolian refinery, domestic oil refinery that the government is constructing. So, obviously, there's already quite a hole between existing domestic production and the need of the refinery. So when the refinery comes on stream, there's going to be no difficulty providing a home for domestically produced crude.

9:27 And the government is quite excited that we should get on stream as quickly as possible and be producing at a decent level by the time the refinery is finished. On the refinery itself, the lower map shows where it is located. It's just, those those black blobs, where it says Mongol refinery, funnily enough. They've located the refinery, at the main industrial area in Mongolia, so it is actually 550 kilometers away from the main producing fields and from our own field. But Mongolia is also building a pipeline to join those fields to the refinery, and that pipeline passes very close to our Heron oil discovery. So once all that is online, that will be great. The progress of the refinery so far is the latest, statement was 16% complete and scheduled on stream in 2027.

10:20 Fair to say this schedule has a tendency to slip, and so it may not be 2027. It may be later. But that is not critical to us as we are planning to piggyback on PETRO China's operation of, processing the oil in block, 19, and then they have a very efficient trucking operation that takes the oil to refineries in China where it is, where it is sold, and then the money comes back to the production sharing contractor, in that case, PETRO China, in the case of block 22 Us, and then the share goes to the Mongolian government. The pipeline joining, the fields to the refinery is actually 42% complete, which is pretty good going since it only started up in, late twenty twenty two. So we are looking forward to the startup of the Mongol refinery and the running of that pipeline.

11:12 But until such time as that's ready, we are planning to be producing oil, through the PETRO China, system. We have an MOU in place with them, and we are in the process of negotiating the commercial details. Before we move on to, the, the details or the technical details of block 20, I'll just get Geralt to run you through a little bit of the workaround we have finally been able to establish

11:41 to allow us to get around this land access problem that has held us up for the last couple of years since our exploitation license was granted. So, Geraltot, I hand over to you. Okay. Good morning to you all. My name is Geraltot. I'm the executive director of the Mongolian subsidiaries of the Promethod Group companies. I would like to update you all on the long running land access issues due to which we have not been able to progress our exploitation activities in the last couple of years. We have continuously updated the market on the situation and how and why this issue has arisen, and I will not go into it now as it's a very long story to tell. Essentially, it was due to conflict in laws and regulations around a petroleum production sharing contractor's ability to operate on the block. I will briefly summarize now the current status of the matters.

12:39 The solution to enable us to operate in the long term after many rounds of the discussions and the consultations with various ministries and government bodies, was to have the Block 20 exploitation area certified as state's special purpose area. The cabinet issued a resolution on the matter in July 2023 and dictated that the procedures outlined in Regulation two eighty seven, which governs processes around state special purpose areas, must be complied with. Subsequent to the issuance of the cabinet resolution, tri party agreement between the local province, land agency and Ministry of Mining needed to be signed.

13:25 However, execution of the tri party agreement was held up by provincial officials due to partial overlap of Block 20 with our province protected area. Once this overlap is resolved and the company has proposed a number of potential solutions, We expect a successful conclusion. The twenty twenty four parliamentary elections added to the delay. But now that they have been concluded, we will be working with government to finalize the certification. Just this morning, the new government has been formed and we will be sure to engage with them to try to resolve the matter quickly. In parallel with the 287 process, the company has sought local and local land approvals as a short term workaround.

14:16 The company has always worked to create mutually cooperative relationship with local authorities and community. With the award of the exploitation license, we will be working in MATDOT for a long time now. We have been working to build upon our relations with the local authorities.

14:35 One initiative that we agreed with the MATDOT authority was to undertake a trip to South Kobe province, where there are lots of evidence of successful cooperation between mining companies operating in the area and the locals. The trip was helpful for the MATD authorities to see for themselves how the extractive industry can be beneficial for the local people. We have also been having meaningful discussions with MATD authorities on how PETRO MATAD can support local development during the exploitation period, and we have successfully concluded cooperation agreement as envisaged in the petroleum law, which is focused on annual funding of community development projects.

15:23 With the Regulation two eighty seven processes taking longer than expected and far longer than they should, we put in request to the MATD authorities for access to operate on three chosen areas within Block 20 under the SUM land plan. We are pleased that MATD authorities approved our request, which is evident of our improved relationship with them. The three land usage agreements have been signed and cover Heron 1, Heron 3, more Heron development well locations and the site for Gobebia. They are valid for five years. We also note that all other approvals are in place for us to commence operations now.

16:08 We still want the Regulation two eighty seven process to be completed as the laws require, but at least now we can work whilst this happens. Thank you, Geraldton. Okay. Moving right along then. Let's get into some technical details, and I'll hand over to Jerry Smart to talk you through those. Go ahead, Jerry. Thanks, Mike. Good morning, everybody. My name is Jerry Smart. I'm the technical subsurface manager for PETRO MATAD. So I just want to run through a few slides to give you a bit of technical background and update as to where we are with both our work on Block 20 and getting Heron on stream and drilling additional wells, but also a little bit of insight into the Gobi Bear exploration well that we plan to drill as well this year.

16:55 So the map on the slide shows in white outline our exploitation license. And you can see there, hopefully, the Heron field marked here in Mongolia in Asen Toghuru as an extension of the all the fields and block 19 running to the south into our block and with Heron there highlighted in green. The other colors there, the orange and the yellows, are additional prospectivity we've identified within the block. And the Far West blob, if you like, is the Kobe Bear prospect, which I'll talk about in a bit. So we are still at a 100% in the block, always looking to try and find additional partners to to join us in this venture. And the exploitation license remains at about 214 square kilometers, and we have that for twenty five years plus two additional extensions. So lots of time to to fulfill the development and explore the rest of the block clearly.

17:49 You may recall that Heron one was discovered way back in 2019, and we did flow quite a large rate from it when we tested that well at the time. Oil is good quality, typical of this part of the world, 44, so it should attract a good price will attract a good price just at Brent or just below. So we're comfortable with the pricing of that.

18:13 Now we've got land access. We're looking to get back onto Heron with a team to complete the well hopefully during July. So that's very soon. And we'll get that well ready for completion and then install the already bought infrastructure on top of that. And for the field itself, as you may recall, is about about 33,000,000 barrels. That's been, you know, helped that's been

18:38 certified, if you like, by a a third third party as well. So we're comfortable at those levels. It could be larger, and we hope to to basically that talks around the larger 60,000,000 barrels talks around increasing the recovery factor up to the levels where we think PETRO China are at. And that might that might mean deploying some perhaps new technology that has not yet been deployed thus far in the country, such as radial drilling and that type of completion activity. I'll show you some costs for wells and the development. Generally, compared to rest of the world, the cost of drilling here and completing wells is pretty cheap comparison. That's certainly for offshore, but certainly for onshore and other parts of of the world too.

19:23 And I guess the other thing to say is that we are we've got our contracts just about in place to to to do everything we want to do this year, so that's great. And we look forward to working with our contractors and get these wells done in the operation season that you know is running autumn because it does get pretty cold towards the end of the year where operating is pretty, pretty tricky. So I think that's what I wanna say on that slide. And just to say that we are talking to PETROMAT, have been for a long time about both cooperation in the operations, but also getting our oil sales contracts in place so that we can basically deliver the Herrick crude to their facility in Block 19 just 20 clips to the north of us and for them then to export it on our behalf with their crude too.

20:10 Moving on a little bit more detail on Herrick. So this map is a zoom in of the surface of the reservoir at Heron. So the green area you see the darker green area is the outline of the Heron Field. And in that, you can see that yellow polygon. That yellow polygon is what's called the proven reserves area that has been certified by the the Mongolian state in which we can do our initial part of our development activities. And flagged there is the location of Heron 1 and then a number of red blobs numbered, and you can see that the the first well we're gonna drill Heron 2 is literally about half a kilometer or so, 600 meters south of the discovery well, slightly up dip on that little closure there. And we hope to get after that during that later in the year as well and add that to the production that Heron should be doing already and to get those two wells in production, hopefully, by the end of the year.

21:10 The other wells three, four, etcetera, we'll be looking to try and get those into an operational program in 2025, obviously, to build the profile and keep going. And with time, as we prove to the authorities the continuation of the reservoirs and the productivity these wells, that yellow polygon would expand out with to to basically cover the rest of the rest of the field such that we can drill the rest of the field up in the years to come.

21:37 So I think I'll move on to the next one. So this is a little bit of more detail about the infrastructure. So the two the three pictures, the top picture is our schematic layout of what the production pad will look like. You can see in the in the right the right hand corner there, a typical beam pump that will connect into the well down and the pump down hole. And, obviously, that's just producing via small flow line to those two large tanks where the crude will be stored slightly separate so we'll give chance for the water to separate out a little bit, and then we'll get delivered into that truck there that will take the crude away to to the export facilities 20 north 20 clicks north of us in in block 19. And the two pictures below, just a little bit of a zoom up in the type of type of things that we're looking at to to use. So those are real tanks that we would acquire from PETRO China, and the bean pump there is a typical bean pump. Mars is slightly smaller than that, but it gives you an idea of very simple technology, very and proven for for decades to be efficient way to produce these onshore wells.

22:39 So looking to get on to Heron very soon to complete it into into a production well and get the facilities on top of it and get going with production, excuse me, hopefully towards the end or third quarter, if not slightly late and early fourth. The tanks are heated, so there won't be any problem with with the the with the crude freezing. It's a bit wet. The crude is quite waxy as per normal. So we've all got that covered, so the oil should be exported easily even when it gets quite cold. Drilling Heron two this year, as I said, again, very similar facilities, duplicate facilities for that as well. So the procurement process for that is ongoing to get additional tanks and and and the flow lines and the beam pump and the we need to get the oil out of the ground at that well location.

23:27 And with those two wells, then we'll obviously start to learn a little bit about the reservoir continuity and the type of, therefore, the type of technology we might be able to use in future in terms of slanted or even horizontal wells, basically to improve the recovery factor per well and get the efficiency up, as we talked about getting up towards a 30% and the increased recovery up to 60,000,000 barrels that those technologies hopefully can provide in the future. So the five year plan then is to basically get our wells in production and then use the information mostly to guide further locations and indeed well design and completion technologies. And with with success and looking at five plus wells a year over the next few years to really build that profile up to our target to six plus thousand barrels a day, and then eventually after after about five years of production or so depending how the wells do.

24:23 We then start to install our injection wells, water injection wells, which we needed, to to keep the reservoir pressure at a level where it can support production. And there's also, opportunities here to use other types of recovery factors such as to to a carbon dioxide flood, that type of thing, to help improve the recovery too. So as I said, our ambition is to get to recovery factor of about 30%, which means actually getting up to a production profile peak of about 9,000 barrels a day within the next few years. So the slide is a little bit more a little bit of detail on Kobe Bear prospect that we hope to drill in late third quarter, early fourth well, late third quarter this year.

25:11 The top map there is a zoom out of the structure map. So you can see the Heronfield there in green. And if you go west, you can see the the two large black lines and the two large basin bounding faults bounding the the the basin to the north and the south, and that orange area with Gobi Bear Prospect march on it. So it's a large area, and it comprises, excuse me, of a stratigraphic stratigraphic trap, large stratigraphic trap, as as the section below shows, where the sands of the Sagonsaf Formation, which is the reservoir at Heron and indeed the reservoir where we had those two oil sands in the gazelle well, which is about about 10 kilometers down dip from the the crest of Gobi Bear.

25:57 And the sand continuity the sand running up to the closure of the basin to to the to the Southwest, and then you get effectively a trap against the basement underlying basement lithologies and overlying Sag and South Shales giving you that typical stratigraphic tract geometry.

26:15 So it's quite large, and we're hopeful that the location will be an appropriate place to test it. We don't we don't wanna just find oil. We wanna find, you know, a potentially commercial reserve of oil. So the location is designed so that if we do find something as well, then we have this commercial reserve that we can then look to build or add to the development processes and planning at at Heron too. So, as I said, the very thick sands at Gazelle Down Dip, 50 meters or so, so we don't have to worry about both sand presence towards the end of the basin in this trap, but also those sands act as a mechanism by which the oil can migrate southwards up dip into the Gobi Bear prospect. So again, we don't have any issue really with the migration of hydrocarbons out of the basin center through Gazelle and up into the Gobi Bear trap.

27:08 As I said earlier, it's quite large in place. It's about 300,000,000 barrels, but it remains a reasonably high geological risk of about 15%. That's the chance of success at 15%. That's partly due to stratigraphy traps are always slightly risky because they're relying on not one but two, if not three, different seal geometries to work for you, but also the large, large traps as well where, obviously, you need it to work all along the boundary of that trap. So they always have a bit of a bit of a high risk than conventional structural traps. But we look forward to drilling this well, as I said, towards the end of third quarter this year. And with luck, then we can add that to our planning for the development of the block. And I think that's it. So I think I hand over now to Zuda who will run through some renewables information for you.

28:03 Good morning. Good afternoon, everyone, and thank you for joining us today. My name is Zula, and I'm the CEO of the SASTEP Renewable Energy joint venture with PETRO MATAD. My background is fifteen years in project finance of financing renewable energy energy projects out of London to emerging markets of Sub Sahara, Russia, SAS. And I also have over nine years experience of renewable energy developments focusing in Mongolia. Yeah. So we have experienced renewable energy development company focusing on all types of renewable energy projects in Mongolia before joining PETRO MATAD over eight years experience.

28:52 And with PETRO MATAD, we have now joined, as you may know, two years, one and a half year. Right? Yeah. Today, I'm excited to share with you our vision and strategy of renewable energy developments in Mongolia and also of potential market market size, market potential. So here, bit of word about government support. Mongolia is has been nine 90% powered by coal fired power plant as a coal export, coal production country. And due to this coal production production, the renewable energy stock has been a bit stagnated.

29:43 But in recent years, the government has been very proactively supporting renewable energy developments and has been declaring it through the presidential declarations at COP twenty six, twenty seven and, you know, has joined the other international countries as pledging 30% of its power to be powered by the renewable energy by 2030 and also 23% reduction of reliance on the term we call for five power power plants. And also meeting a 100% of national demand by domestic supply is also on the on the radar. Yeah.

30:40 So the this government support has been evidenced by the

30:46 clear and international standard of renewable energy policy, which has has a US dollar revenue tariff, and there's an in place financeable by the multilateral banks banks financing for the grid financing. Yeah. For the operation projects in Mongolia. So also bit of forwards about the renewable energy resources potential. Due to its geographical location, Mongolia has flat terrain and also one of the highest solar radiation in the world. So it's shown here as third in in the by solar radiation. Also,

31:42 consistent wind speed, yeah, high wind speed of over ten seconds per meter for over 200 meters high average. Right? And for this wind resources and wind and solar resources, Mongolia is ideally located for large scale wind and solar projects. So for the market potential, Mongolia is going through the energy transition. So there's a huge demand for covering renewable energy projects inside the country to reach the 30% of government's pledge by renewable energy.

32:38 Plus, it's recently, there's also government to government discussions going on to export renewable energy to China. So I will have also a few words later about our MOU with the Chinese state owned utilities to start export to China project. So I would say that renewable energy development is at early stage of growth in Mongolia with its first wind project started only in 2012, the second in 2017. So we are eager to have the opportunities of the early entrance of renewable energy developments in Mongolia.

33:34 Mhmm. So a few words about our project developments. We have a number of exciting project prospects, but currently, we are focusing on two major renewable energy developments, which we started last year. So one of them is we are focusing on the battery storage developments in Mongolia mainly because the battery storage is highly prioritized by the government as an urgent need to stabilize the grid and also decrease the renewed decrease the energy import from Russia and China. The the new the battery storage is needed in Mongolia because Mongolia during the nighttime export exports electricity at cheap price to Russia.

34:39 But during the peak hours of morning and evening, imports electricity from Russia at high price. So government is in need to reduce such reliance of energy import from our neighbors. So we've been developing 50 megawatt battery storage project in which is will be connected to national grid charging and discharging to stabilize the grid. And we are now finalized the feasibility studies, and we are targeting to get this project ready to build by 2025.

35:24 There's also potential for battery storage need in the country to expand for up to 350 megawatts. And as you may know, in December 2023,

35:44 an 80 megawatt battery storage project has been financed by Asian Development Bank for over 120,000,000 US dollars. And this project has been commissioned by the government and has supported the grid stability in January 2024. So our project is the second largest private battery storage project, so we are excited to work on this project. And our second project is a green hybrid wind powered green hydrogen project, which we have been working to supply one of the largest mine in Mongolia.

36:33 You know, you you might know Oyu Tolgoi. This the shareholders are Rio Tinto and the government. Yeah. Exclusive has been signed for this off taker as an off taker of hybrid renewable and green hydrogen. And so this project involves 24 megawatts of wind to generate power. So we've been quite successful on this project to get government support and also Japanese government grant up to for the first phase, up to 40% of the project cap CapEx and then further grant of another 40% of the CapEx is is to be approved and in discussions with the Japanese government for the next phase of the project.

37:33 So we are excited to deliver this project also in 2025

37:42 to get ready to build status. Also, so on the export to China potential, we I have already mentioned about the government to government discussions. So in order to benefit from these opportunities, we've been early in trying to sign exclusive in Moi with one of the top Chinese state owned utilities who has opened rep office in Mongolia to work on this projects with together with us. Yeah. A few words about our team in Mongolia of Sunstep team. We have brought our existing renewable energy project team who have high experience and reputable high experience in Mongolia.

38:35 So a numb so such as we hired people from National Dispatch Center who who's a CEO of National Dispatch Center, you know, who's this off taker single off off taker of Mongolia. And also our government relationship adviser, miss Kanchen, has been head of tariff and licensing department in the energy regulatory commission. So our engineers actually has been working for over fifteen years on all existing wind and solar operational greenfield developments projects and get the projects through the multilateral financing and construction. So we are a highly experienced team in Mongolia, and we are uniquely positioned to benefit and grow the the Sunstept team into a leading renewable energy development country in in in in in Mongolia. Thank you.

39:47 Thank you, Zula. Mhmm. So I think this is the the final slide, and I'd just like to reemphasize what what you've already heard without, hopefully, just repeating it all. So our goals for '24 and '25 are primarily to commence production and development of the Heron discovery in Block 20. It's been a long time coming. It's been too long coming. We're very, very pleased that we found the workaround we found. We're pushing for the long term solution, but at least now we can work in parallel with that, and that's a major step forward. We also want to do some near field low cost exploration drilling, on the Gobi Bear prospect. Jerry showed you that. We know this basin is prolific for producing oil, So all the risks associated with is a resource? Yes. There is. Is there migration? Yes.

40:38 There is. At least as far south as Gazelle. Is there a reservoir rock? Yes. There is. We've seen it in all the wells immediately to the north. The only remaining risk is actually the the the trap efficiency. And whilst combo strap traps do have a higher risk because of the seal risk, they work very well around the world. Buzzard is such a field in the North Sea. Seria is a similar field in in Libya, and there are many giant fields around the world that has this trapping morphology. So we're excited to get this done. And as I say, it is very, very cheap, but could be very, very high impact. The development of the renewable energy projects, that's going very, very well. At some stages, we we wondered, as PETRO MATAD, about the schizophrenia between the Ministry of Mining, which seem to be so slow moving, and the Ministry of Energy that was moving faster than We're we're we're glad to see the Ministry of Mining potentially catching up now, but this is very, very good for the developments we've seen in the renewable energy sector.

41:36 We want to exploit our our early entrant status, and we are attracting quite a lot of attention. People with stalled projects who perhaps don't know how to develop them further are bringing them to us. Our goal here is to achieve self sustainability, and I'm talking here financially, on oil production revenue and deploy that revenue on development drilling inherent near field integration as we see fit on new PSCs, which once we sign them, have relatively low commitments and particularly low in the first couple of years, so it's not an urgent cash need there. We hope to be financing those out of production revenue down the line and also to develop more renewable energy projects as there seem to be many that are coming our way.

42:28 As has been mentioned, the timing is Heron one, reperforation, stimulation, completion in the month of July. We hope to be able to say something definitive about exactly when in the month of July pretty soon. Put the well on production. We're targeting late third quarter there because we want to have everything signed up with PETRO China to be able to make sure that the oil can start to flow and go somewhere and can generate that revenue. We also need the surface facilities in place. But as Jerry showed you, we're using a well pad design that has been done many, many, many times immediately to the north, so the contractors are all very familiar with it. So they're we're not we're not reinventing the wheel here. Heron two, the plan is to drill complete in the the latter part of the third quarter and try and have that well on production by the fourth quarter.

43:19 The Gobi Bear drilling will be late third third quarter, May maybe into the fourth quarter depending on rig availability. We have two potentially interested parties, one of whom we already have a contract. We want to sign the two new PSCs in the latter part of the year or early twenty twenty five, but that's not critical path at the moment. We've got plenty to be getting on with. We want to bring two fifty megawatt battery storage to bankable, ready to build status in early twenty twenty five. And similarly, we'd like, if there's gonna be a phase one to the OT green hydrogen project, if OT wants there to be one, that could be on stream as early as 2025 as well. So I think with that, we will, close the, the presentation, and I will now move to, the question and answer session.

44:08 As I mentioned before, we've had quite a lot, submitted before the, before the meeting convened. So thank you for those. And we've had a few more coming in as we've gone along. So, I've tried to split the pre submitted questions into kind of categories by subject, and we'll go through them, in that order. So first one's government related. The question is, what have you learned about dealing with the Mongolian government which will influence future negotiations and applications to hopefully oil the wheels to speedier outcomes. Yeah. Let's start with an easy one first. I think it's fair to say that I mean, I've operated in many, many countries around the world where the bureaucracy can be frustrating and infuriating.

44:56 In Mongolia, it's been kind of particularly slow. And I've I I have concluded that that's because PETRO MATAD has been the first company to do a number of things that either have never been done before or were done a decade or more previously under a different petroleum law. And when you are groundbreaking like that in a slow slow moving bureaucracy, it really slows you down. I think if we can get ourselves into production, then the groundbreaking for the next things we do has been done. We've broken that ground. So I'm hoping that next time around, it will be a lot easier. We've established, as I said at the start, very good relationships with the government.

45:43 I see the the regulator in MR PAM as being much more user friendly than it was when I first arrived in in Mongolia. The petroleum section of that that regulator is really getting its head around the sector and wants it to be successful and needs it to be successful because of the the Mongol refinery. So I'm hoping we've done the hard yards, but we're learning every day. Next question is, has the slightly uncertain outcome of the general election going to be a setback for our efforts to produce the oil we we have, or can we expect production to begin shortly? Gerald Todd, why don't you say a little bit about what's happened over the last twenty four hours on on setting up the government?

46:30 Okay. Sure. Following the general parliament election, the coalition government made of ministers representing the large three parties was formed. The three party chairman have come forward to note that the coalition government will be effective in achieving common goals for the country. Additionally, the previous Prime Minister, Oyo Neidend, will continue as the Prime Minister. Mongolia is strongly focused on the energy independence and is constructing an oil refinery. As so, we expect the new government to continue to make this priorities strategic objective and will take steps and measures to ensure domestic oil exploration and production will be intensified and therefore support the company's efforts and operations.

47:26 Thanks, Gerald Todd. I I would also just add that in the previous parliamentary election, which was four years ago, the Mongolian People's Party won effectively in a landslide, and at the time, that was considered to be a good thing. They've got a massive mandate. Everything will now be clearer, but they did have quite a vocal opposition. This time around, people who know better than me are telling me that actually the coalition's probably a good thing because everybody that's then involved and and there's less rock throwing than perhaps there previously was. So we certainly will look forward to working with the new government, but the company tries its very, best to be completely apolitical. So whoever's in charge, we we can work with without them thinking we're the other guy's people. Next question.

48:12 Can you explain the risk to PETRO MATAD with having only five year land use license, and can you explain how this conflicts if it does with a twenty year exploitation license? Does the land use being only five years not curtail the exploitation? Now the exploitation period is already, is already enshrined in law. As Jerry mentioned, it's twenty five years plus five plus five. And effectively, it started in August, July 2021. We have actually told the regulator that we don't consider it starts until we can actually work, so we would say that is this year. They haven't argued with us on that point yet. What we have achieved this time is we have we have managed to get the local authorities to grant us land use, for stuff we're going to do in 2024 and potentially 2025, And the validity of the permits they've issued is five years.

49:04 We can, at any time, apply to the district authorities for other areas or to say we no longer need this area, but we need that area over there. And if they put it in the land plan, then we have that on a rolling basis, and they will probably be issued with each a five year validity. So it does there there is no conflict here. We have the local land permits that certainly, the ones we've got now are enough that we're going to need for the next twelve to eighteen months. But during that period, if the the the certification of the area of state special purpose land has not been finalized, we can apply again to MATD district for more permits. I think getting the first one was the hard part. I think following up, will be easier because MATD is gonna see how we operate as a company. We're already cooperating with them. We're we're helping, with the construction of a kindergarten that they have wanted to do for some time as part of their hundred year anniversary, which takes place this month. And we are looking to win hearts and minds to make sure that there are no regrets and that they will continue to issue these permits as and when we ask for them, if we need to, if the certification is held up any longer.

50:17 On to strategic and commercial, matters, probably mostly for me to answer, I'll try and be brief. Do we see significant upside from the base Zeus projection for Heron given the 65% oil price used against the current oil price and most oil price projections going forward? Yes. Fortunately, we are in a higher price environment at the moment in the in the 80 plus dollars a barrel. And the good thing about Mongolian terms is that under the PSC, effectively, it's a straight line. As the oil price goes up, our revenue goes up, and we do benefit greatly from the higher oil price. Obviously, the same is true on the downside, but the breakeven price of the oil is way, way, way below where the current oil price is. So the higher the oil price, the greater the revenue. And we are we we work with an internal deck of around about $70 a barrel to make sure we can, support ourselves.

51:14 But with the current oil price, we're looking probably at a sales price of higher than 81. Many of us are looking at a dividend based return on revenue as opposed to capital gain. Although it's the early stage of the company's transition towards revenue generation, what timelines are we realistically looking at for maiden dividend introduction? Yeah. That that would be really nice. We we hope to start throwing off, let's call it, discretionary cash flow. We get to, you the cash we generate, we'll use to keep the company working, keep our team in place, keep our operating capability, and then that money, we will determine what to do with. Obviously, we would like to get production up. So we'd like to use some, if not all of it, in the early years to drill more development wells, to increase production, to generate more revenue. But I do appreciate that even for small cap companies like PETRO MATAD, there is now a push from investors to see a dividend component, and we haven't lost sight of that. It would be nice to have one. It really it really would. So I I can't be specific as to when that might be, but we certainly the board certainly has it in mind.

52:25 Can the company provide more information regarding the plan route to cash generation, the intended financing for future developments? I think we've more or less answered that one. We want to start generating cash to be able to finance ourselves, not to continually come back to shareholders for money and to deploy that the the discretionary cash on the other things that we have in the in the portfolio. Is there more focus to accelerate the Heron field development to capitalize on the potential Mongol refinery coming online? Heron is going to be quite critical to the Mongol refinery getting filled up whenever it comes online. If we were just tied to the startup of the Mongol refinery, then people would be telling us or the government would be telling us to leave the oil in the ground until it's ready. Nobody is telling us that. Everybody wants the revenue, including ourselves.

53:12 So we are hoping that the Mongol refinery is up and running soon because we'd like to put the oil down the pipeline rather than truck it. But until it's ready, we will piggyback on PETRO China's operation. Can you provide an update on the state status of an agreement to transport and sell the oil? We have an MOU with PETRO China that was signed a couple of years ago, that'll that that envisages having use of their facilities and their export route. We are still discussing the commercial terms there, but PETRO China has spoken to their buyer, which is China Oil, a state owned entity in China, and they have agreed to take our oil mixed in with PETRO China's oil in the early part of our production.

53:59 So and we will checks will be cut based on the percentage of, how many percent of the oil was ours. So that we we see that as being, just needing to finalize the commercial details as soon as the mid summer holiday is over in in Mongolia, which effectively starts today. I'll be heading back to UB, and my first port of call will be PETRO China's office to try and finalize negotiations. As I mentioned earlier on, PETRO MATAD has does have some of its own issues with Mongolia at the moment that it's fighting hard to fix. We hope that that won't be a distraction, and we're certainly encouraging them. And we have, the Mongolian regulator, MR PAM, on our side because they very much want us to start up and get producing.

54:45 And so we think that they will be a big help in these in these final negotiations that we're doing. Do we have any contingency measures in place if PETRO MATAD negotiations prove problematic, and is that a likely scenario? I don't think it's a likely scenario. There might be a bit of a bit of delay if they're if they're distracted, but we hope not. And we hope if there is, MR PAM will step in and and push them along. We are we have looked over the years at a trucking operation of our own. It wouldn't be as cost effective as trucking with with PETRO China's operation, but it is possible. So we do have that possibility, and there are buyers in China who would take our crude. As Jerry mentioned, it's it's a nice light crude, waxy, but that's what all the refineries around here are used to.

55:34 So we we have done some work on that to put in place a plan b if one is needed. A takeover approach by PETROMAD DQE would make logistical sense on many levels. Would that be a feasible development? Have any initial approaches been indicated on any level? And given the talks that have occurred over an extended period. No. We haven't had any offers for takeovers or or or indeed farm ins. PETRO China has done a big review of our dataset under under nondisclosure agreements in terms of the the data confidentiality. They know a lot about our block in that they used to hold it for a for a short while. We think they believe there is good potential in the block, and we're we've told them we're always open to cooperation with them whether it be at the operational level, which we're currently doing, or whether it be at the at a working interest level. And we we continue to have a completely open dialogue on that.

56:32 The government of Mongolia will benefit from PETRO MATAD production via PSC and strategic factors related to energy independence. Any further link ups beyond the straight PSC arrangement, for example, PETRO MATAD deploying into a pro proxy national oil company. And then there's some very nice words about me personally that modesty forbids me to read. We've tried to help in the last four four or five years, we've really tried to help the regulator in particular and the Ministry of Mining kind of improve the the aspect and the focus on petroleum in Mongolia. There's plenty of room for lots more investors than are there now. And I think that is we've gained the trust of the regulator through that, and we have a very, very good working relationship.

57:18 And we've told them we're open to all manner of of of cooperation. I don't think they trust us enough to make us their proxy national oil company. I think they probably want to keep that for themselves. But we have shown them PSC models where a national oil company becomes involved as a partner, and those models work well elsewhere in the world, and they've taken those on board. Couple of questions here that I think have already covered on oil transportation and on the refinery. Ah, here's one that we've had a fair few times that we need to address. Why is the company going after wildcat drilling? Has the company not learned from the past? Why not just concentrate on developing Heron one, two, three, etcetera? MB, I think that means me, has wasted millions on wildcat and has achieved no success.

58:05 As a long term holder, I believe PETRO MATAD should make more money first before doing wildcat drills. Okay. Fair enough. I won't harp on about MB's experience before he came to PETRO MATAD, but fair to say that in wildcat drilling, we are, in recent years, over four. We drilled four. We found lots of indications of hydrocarbons, but we haven't made a commercial discovery. However, on near field drilling, our recommend our our record is two hits out of two tries, and that was Heron and Gazelle. Heron in 2019 was a near field exploration well. Gobi Bear is going to be a near field exploration well as as I explained. Everything is in place, and the only the only uncertainty is trap integrity, which makes the the chance of success a little bit wild, Kathy. But this is a very cheap, very high impact well.

59:00 We'd like the results sooner rather than later, particularly as we want to develop block 20 in a sensible fashion. But also if we are likely to discuss with counterparties the possibility of partnering in the next few months, I wouldn't like to be giving away the exploration upside. I'd like to be able to prove that some of it is there. It also gives us a bit of exploration romance. And although we are looking forward to being a production and revenue generating company, we are an exploration and production company by by nature. So exploration is something we we we will do, but I like it to be lower risk, and I like it to be low cost. So, anyway, watch out for the results of Gobi Bear. There was a couple of other questions along those same lines.

59:48 Okay. There's a few questions here related to the raise you'll be surprised to hear. First one, can you tell me why big book build were used for the recent retail share offer? I asked because my stockbroker was not on the list of eligible stockbrokers taking part in the retail offer. This made it impossible for me to participate in in the offer even though as a long term shareholder in PETRO MATAD, I had every right. Yeah. I'm sorry to hear that. Book build has told us, since we asked, that, it was open to any intermediary at any time during our retail offer, and that there was no technical, legal, or settlement reasons for an intermediary not to register and participate in the offer on your behalf. We value our existing shareholders, and we wanted to include them in as as much as we could in the capital raise.

1:00:38 I have to say that's not a strategy that's universally welcomed by institutional investors, but, we chose book build because they seem to offer what looked to be the best solution. I know that there are some geographical restrictions that we faced before, and I was hoping some of those would be ironed out. But as I say, I'm sorry that you, in particular, mister Questioner, were unable to participate. I do suggest you follow-up with your broker. Book Bill says that if your bank broker is able to buy shares on your on your order in the open market, there should be no reason why they could not do so in the retail office. So please follow-up, and I'm sure Book Bill will be available to answer any other questions if there are any. Next question on the raise. Would the company consider an initiative to spread awareness of PETRO MATAD as an investment prospect to larger funds institutions encouraging open market purchases by said institutions, and further redressing the retail the retail institutional holding proportions.

1:01:39 A maiden dividend introduction, even a modest one, would help in this regard. Yeah. Thanks for that. I'd love to get some of the bigger boys in. On the matter of dividends, I've kind of I've kind of said some of this already. We I I would really like to to have one. I can't really say when. Obviously, as we generate discretionary cash flow, it's gonna be a decision as to what makes most sense for the company and the company shareholders at the time, but that could well involve the the the payment of a dividend. And, yes, that might attract some of the bigger boys. On attracting the larger investors, the lack of dividend is one issue, and our relatively small market cap is another. They've been barriers to the kind of people that will actually open the door and let us pitch.

1:02:24 Those are barriers we both both of those are barriers we hope to overcome as we transition to revenue generation. So, yeah, I would like them on the register. Next question. Why did you choose a private placement over issuance of warrants for current shareholders? Can you guarantee there won't be another private placement that massively dilutes private investors without allowing a proper participation both inside and outside The UK? And I'll take that one together with the next one. The company is within weeks of oil flowing from Heron 1 oilfield. Why didn't you wait until the oil flowed and then get a loan from your bankers based on the oil asset held by the company? The way you obtain funds to develop develop the oilfield has diluted the company asset by 50%. I just say that our business is primarily one of risk management.

1:03:10 Yes. We could have funded Heron One to be on stream and have had a small amount of cash to spare to run most of the business into 2025. But we have been entirely reliant on one well in a base known for its unpredictability. With only one well available, any negative incident or underperformance would have been a major concern for the company, and raising money in an emergency under those circumstances would have been, let's say, extremely difficult. So after long deliberation, the board chose to go for an equity raise, recognizing we might suffer on the discount, which unfortunately we did, but at least we would be able to offer some participation to existing shareholders, fund ourselves for an exciting program, and improve the chance of higher production, higher revenue, and have some backup in the event of stuff happening, which occasionally it does.

1:04:10 As regards the guarantee on future raises, a guarantee is a hard thing to give, but our strategy now focuses on getting revenue generation underway, getting that to bring the company to self sufficiency by 2025 with discretionary cash flow accumulating so that we're not always coming back to shareholders for money. Next question. I want a similar theme. Why did you ignore and insult your long term shareholders with a very lowball raise and a minuscule number of shares allocated to real retail sector. Was this because you couldn't put the effort into create a prospectus? Or was it only important to provide shares both cheap and in volume to management of PETROVIS? Well, we did the best we could under the circumstances. That may not sound like much, but that's really what I what I can say.

1:04:58 The participation of PETROVIS and management was essential in encouraging new investors to participate. Both PETROVIS and management confirmed their willingness to participate at zero discount to the share price. So those involved with the company for many years weren't trying to get anything on the cheap. And I would also just like to say that PETROVIS' support of the company is something that precedes my involvement with the company, but has been there ever since I joined, and it's something we should all celebrate. They have been there for the company during their darkest times, have been invested since 2006, and have supported every initiative to move the company forward. So they have they have been super, super supportive.

1:05:46 Okay. I will now hand over to Jerry to read out and answer the technical questions we received in advance, giving me the chance to have a look at the ones that have come in live. Jerry, over to you. Thanks, Mike. So the first question in the technical section is, what are the chances of success for Heron 2 well? So the location, as I showed you on the map in the presentation of Heron 2, is very close to Heron 1, about 500,600 meters to the south, where we hope to find very similar reservoirs as H 1 and let it flow at the same rates as well. But you can never be sure of any drilling into the subsurface. So discussion of our technical team, we think the chance success of of Heroton is better than 80%. So and that will diminish as we drill more wells into the future.

1:06:35 Next question. When we hopefully start to take oil from Heron one and drill Heron two, when do you plan Heron three and four? Thank you. So I think Mike said the current timeline for Heron one is to is to get it on stream at late q three, planning Heron two likewise in mid q three and first oil in early q four. And Heron three and four will be part of the 2025 program subject to obviously to well performance and cash generation from the initial wells when they start up this year. But just to note, as Mike mentioned, we do have land permits for both of those locations, Henry and 4, so there's no issue there. Next question was when do we start producing oil? As I said, it's basically q three this year from Heron One. Next question was in the recent Zoosk note, the cost of each Heron well was quoted at 4,000,000, but previous figures stated 1,500,000 per well. Please, can you clarify the actual cost of each here and well?

1:07:30 The 1.5 cost is just for drilling and evaluating the drilling results. So that's just literally physically drilling the hole. The 4,000,000 figure is basically everything get the well into a productive well, and that includes both the sim stimulating the well, testing it, putting the complete string down the hole, putting on on the surface the infrastructure, the beam pump, the tanks, etcetera, and getting the thing to flow. And all in, that's 4,000,000. So so that's the difference between those two costs. The next question was, will the drilling target for the Thompson Rhone Basin in part of the block 20 extension still be targeting q three twenty four in parallel operation Heron one. I think that means asking about Gobi Bear or or maybe Heron two. I'm not sure. But as we mentioned before, both of those, we hope to drill in in q three this year and get those down and hopefully hopefully get them, certainly, Herringtons on stream before year end.

1:08:28 Next question was, and this relates to the the new blocks that we're hoping to sign up for this year. Question was, we had multiple references to the new blocks and updates, never any further details. They've been referred to as huge and part of existing producing basins. Could you please could you expand in any points in any way? So I can't give you the exact location of the blocks because we haven't been awarded them. But they let me just say that they are located in the Southern part of Mongolia, and they do border producing basins in China. Those basins in China produce from the same age rocks that we are familiar with in Mongolia, that that is the sort of lower Cretaceous, upper Jurassic rocks. But they also, in these places in China, have proven oil and gas at deeper reservoirs that have yet to be drilled actually in Mongolia and explore for hydrocarbon. So we are hopeful to bring those plays, if you like, with petroleum systems into Mongolia through the blocks that we hope to sign up to sign up recently.

1:09:30 There was a there are existing two d coverage in both of the blocks, but we are struggling a little bit to get to get the hands on the data. But we will initially evaluate the blocks of existing magnetic and gravity data and and use our, actually, large and probably the best database in the country to basically evaluate where we think the actual basin outlines are and focus on those areas in any future acquisition of Seismic. Yes. The blocks are huge. In total, the two blocks are over six about 60,000 square kilometers. And to put it into context, for those of us who are UK based, that's about three times the size of Wales. So massive blocks to explore. And one of our first, actually, efforts will be actually to find the basin areas wind in ice basins. So if we need to and the work program is designed such that we can relinquish areas that we deem nonperspective and retaining those that are, and, obviously, that will help that will reduce our holding costs in those areas as well because we pay a a per year a per dollar kilometer fee for holding the acreage.

1:10:39 The next question was let me scroll down a little bit. Are there advantages for PETRO MATAD for a recurring annual agreement with DQE as opposed to a yearly cycle of contracts? Yes. Clearly, there's benefits in trying to establish a multiyear, if you like, or a a rolling contract with our main contractors. Clearly, that that will benefit from economies of scale and continuity of work practices and also diminish the effort of trying to do annual contracts, which is a very contimeing effort. So we are working on that basis, but the exact structure of the contract will be determined with the with the the existing regulations and country and our discussions with MRPAM. But clearly, that's our ambition. Next question is, with regards to potential of the two new licenses, knowing PETRO MATAD have over the years gathered seismic info on areas Mongolia, has PM PETRO MATAD got access to seismic info on the two blocks. I think I mentioned just now that there is limited data on both blocks.

1:11:41 We do have images of those lines, and we are trying to track down the original data takes so that we can evaluate the the reprocessing of those seismic in future. But finding those tapes, I'm sure anybody who knows has done exploration like this, some of the old data tapes are actually difficult to track down where they actually physically are located, but we are working on that. We will use the existing MATD graph to determine the basin outlines and and use our extensive databases needed to to make sure that so that's that's leveraged as best we can to to uplift our understanding of the prospectivities of these new blocks before we acquire and plan seismic. The next one was does the company envisage any significant problems with reentering the wellbore of the Saharan one to complete and put into early production given that it's been inactive and suspended for almost five years? Short answer is no.

1:12:38 The well had a production line cemented in it at the time and before we did the well test. So that basically protects the whole of the wellbore and and, obviously, importantly, that that protects the the the the producing reservoirs as well that lie behind the casing. The suspension program that we used on Heron is a standard design. So that basically is a couple of plugs in the well that are easily removed when we reenter the wellhead. So no, the answer is there shouldn't be a problem entering the well. And hopefully, we will get that done very shortly as we start operations in mid July onwards. There was a question about schedule for June and the campaign. I think we've answered that one. Question, please, could you touch on summarize Gazelle and the plan moving forward as this was briefly mentioned in previous RNSs?

1:13:29 I I alluded alluded to, I think, was shown before in the presentation that Gazelle had two thin sands at the top of the second half reservoir section that were oil bearing and quite a thick sand beneath which unfortunately was not. The well was suspended and we can go back and test those sands if we want to. But I think the upside here in Gazelle is to probably drill to the south in the higher part of the structure where the sands we actually found oil bearing might well thicken up and present a thicker target and also that lower sand might come up into the structure and where it might also be aura bearing. But clearly, our immediate and near term objective is to focus on Block 20 and get additional production wells drilled and also to drill the Gobi Uaire well, really to add scale to the potential of the block.

1:14:16 I think that was all from me from the previous posted questions. Now I think it's a couple questions for Zula. Mhmm. Sure. You got the question, Zulu? So I got the question. So from the question and the poll. Right? Or is the question mister Buck has referred that to the renewable potential as massive in several interviews. Can you please expand on what and give investors an idea of the market size potential? Right? So for this question, I have described that Mongolia's geographical location has exceptionally good wind and solar resources.

1:15:10 Wind is exceptionally well, especially in the Zephyrh area of Mongolia. Probably, this is where have land access. And so now with the energy transition, Mongolian government set ambitious plan to set the renewable energies support by 30% of the total demand. So there's project that needs to be delivered for this target. And plus, now recently, g two g discussions on the export to China potential can be huge size and China's commitment for the renewable energy power. So China already decided that it will not finance any coal fired power power power projects. So they are into the transition of renewable energy.

1:16:01 And important is discussion of importing the new power from Mongolia, which can be a big ups. Mhmm. And then there was another question, which was the timeline associated with the China 1.5 gigawatt of export to China potential project that you have signed in Mayu. So initially, due to the this deep discussions of renewable energy, they just started two years ago to perhaps approximately one or two years ago recently. We have joined the government discussions as well and visits to China. And so the this plan has been actually to sit in the next China's five year plan.

1:16:48 China has a five year plan, which is due to start next year. So so it it we've we've been seeing that this is within five three to five year plan for to start this project. But given that our Chinese partners has has been very proactively starting feasibility studies and also open drip office in our building. So and so we understand that this can be potentially also coming faster than this. We we are fine. So we appreciate it. Okay, Zula. Thank you.

1:17:35 There's I just know there's two I missed. I think if you provide more information regarding the plan to cash generation and the intended financing for future developments. So obviously, we we want to get cash generating as soon as possible, As soon as we've demonstrated that we've got a reliable production stream and revenue generation, then we we will have the potential to put some debt behind the behind the asset, and that would certainly help because we like to move this forward quite quickly. There's potential to drill many, many year wells per year on this. If we're funding them ourselves, that might go a little bit slower than maximum value generation. But were we to find a deep pocketed co investor, then that would potentially be a good result because although there is potential dilution when you farm down, if you're actually accelerating production and increasing value dramatically, then that dilution basically goes away. So we're looking at all those options.

1:18:36 There was one other question which was, when do PETRO MATAD expect revenue from the renewable energy joint venture with Sunstep? If we re if we retain if Sunstep just behaves as a developer, gets things ready for construction and was then to flip them, then, yeah, then there would be some development premiere coming back to Sunstep that potentially would be dividended back to the shareholders. So that could happen reasonably quickly. But, actually, our goal is to stay involved in the the projects that we're developing, the two we've got developing at the moment, and we'd like to stay involved. We don't want to use PETRO MATAD paper to finance our share of that. We're obviously looking at every possible option, but a phase one of OT could be on stream quite soon if OT chooses to have a phase one.

1:19:26 And, and the battery storage, once all approved and, all of the permits are in hand, is actually quite quick to build as the ADB finance project showed in 2023. So, yeah, I'm not exactly sure when, but hopefully soon. Okay. Look, guys. I think we've been going on for far too long, so let me just take the the the questions that have come in live. Thanks for those that have put them in. First one, what price will, PETRO MATAD realistically achieve for a barrel barrel of oil selling to the likes of China who are receiving discounted Russian oil? The good news here is that China has always paid a globally benchmark price for Mongolian oil, and the conversations we've had with PETRO China and with China oil such that we can put our oil into PETRO China's tankers and we'll get cut a check when it gets to the other end.

1:20:15 That sales contract is at a globally benchmark price, which is Daiching 30 3 minus a dollar a barrel. For those of you unfamiliar with Daiching 33, it's a Chinese crude that actually, as far as I know, never gets exported to the world market, but bounces around like all the other globally traded crudes and is usually between a 510% discount to Brent. So that is the price we will get by piggybacking on PETRO China's operation. Can you give us any idea or a broad outline of what the commercial agreement with PETRO China might look like? We've written some standard tariffing contracts and sent them to PETRO China for their review, and, basically, they're on a per barrel basis for the process in the oil, which is fundamentally just taking out any residual water and not letting it freeze, and then and then trucking it.

1:21:14 And those are pretty standard operating agreements. Obviously, PETRO MATAD having to mull them over because they've never had this possibility before. But the fact that they signed the MOU with us in the first place, I think, means that they're keen to see their facilities go back up to somewhere near capacity, which Heron production would certainly help with, and a bit of third party revenue can't be a bad thing either. We think that PETRO China will be I don't want to say kept honest because I don't think they're going to inherently dishonest. They'll be kept honest by the fact that MR PAM knows very, very well what their actual cost base looks like because they've been auditing them since 2005 for cost recovery purposes.

1:21:59 And because the tariff will be applied to every barrel of heroin production, which includes the Mongolian government share, they won't want to be being overcharged. So I think we've got a very good ally there in the Mongolian regulator. If Ulaanbaatar City tenders for a new 25 megawatt battery storage system in the fourth quarter of twenty twenty four, will some step bid? Yeah. I think we probably would. And what do you think, Azula? Well, Azula's on mute, but I'm sure she was agreeing with me. Okay. Next one. Mike, have you had any interest from foreign companies to joint venture with PETRO MATAD? We tried quite hard, and we haven't been hugely successful.

1:22:46 New country entry was always a bit of a leap for people that aren't already in a country, and it's become harder as the years go by. Some companies have actually blown off any onshore operation because they consider it too difficult. And, of course, that's all that Mongolia operate offers. And, others have, you know, been specific about as part of their energy transition. We won't go to new countries to look for fossil fuels. We we've we've recently had a couple of conversations with people about the potential to partner, and we certainly never shut the door on that. But up until now, I can't I can't claim we've had, apart from a couple of offers back in 2018 to partners in block four that were a bit derisory. I can't say we've had much in the way of of interest, unfortunately, since that British Gas or BG Farm into PETRO MATAD back in the day, but then shell bought them and left.

1:23:40 Can you talk about anticipated returns on renewables and thoughts about monetizing these? I've kind of mentioned there, you know, potentially, we could get some development premium if we just flip some projects we develop, and those could come quite quickly. In terms of of revenue, you know, we we'd like we'd like these things to be these projects that we've got now to be on stream pretty quickly. We need to make sure we can fund our share of them, though, so it all all rather depends. What is the expected flow rate from Heron One? You saw from Jerry's slide, it did over 800 barrels a day on DST. We're assuming initial production rate for all our wells is around about 300 barrels a day sustainable, which you might say, wow, that's low compared to 800. Yes. It is. We don't want to be overly optimistic because we've obviously hit a bit of a sweet spot with with Heron One. We don't know how large that is. So, we've we've been, I hope, reasonably conservative with our initial flow rate assumptions, and that's based on looking at performance of wells in the in the basin.

1:24:45 And finally, are there any ways to mitigate the are there any ways to mitigate the lull in production revenue due to the harsh Mongolian winters? Actually, production is the one thing that goes on through the winter. PETRO China has done a very good job of keeping the oil warm and getting it to market through the winter months. So although drilling shuts down, production does not. So we don't see that as being a problem. If we were in the position to have a multi well program to run, I'd like to think that we could actually winterize a rig or two and have year round operation on drilling. But, now once we're up and running for production, there shouldn't be any, any lull. Production should still continue.

1:25:31 So I think that's it. We probably, I'll be interested to see the statistics of how long people lasted. If you're still here, thank you very much for your participation, for all of you submitted questions. Thank you. I hope we've been able to answer all, if not directly, then indirectly if they were similar to other questions we have answered. I'll hand back to Alessandro now to wrap up. Perfect. And I'd just like to thank you all for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will only take a few to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of PETRO MATAD LIMITED, we'd like to thank you for attending today's presentation, and good morning to you all.