Petro Matad (LON:MATD) updated the market on the progress of its convertible security deed of its investor, Bergen Global Opportunity Fund.
The Mongolian oil exploration company said in a statement:
“In order to provide the Company with an opportunity to minimise dilution to the existing shareholders, effective 14 August 2017, the Deed has been amended and restated by mutual consent of the Company and the Investor.”
Specifically according to the agreement, the schedule of equity investments first revealed back in May will be postponed until 15 October 2017.
Chief executive Ridvan Karpuz had previously said of the additional funding for its Bergen facility:
“This funding secures our firm work programme for 2017 and 2018 comprising 4 exploration wells and up to 300 km2 of 3D seismic acquisition.
“The Bergen facility is extremely flexible and allows us to effectively manage our cash resources over the next 18 months during a very active operational period for the company.”
In addition, instead of the monthly funding during that period, the new agreement will see the investor provide an amount of $1,500,000 by way of a 24-month interest-free, which will later be converted into regular shares.
Back in June the company confirmed that the Mongolian authorities had formally approved their proposed extension of its exploration projects for two years until July 2019.
Petro Matad said the extensions would allow it to follow through with its planned 2017 work schedule, which is set to include drilling two wells and various a 3D seismic exploration.
At the time, the company said it expected its financial commitments for the extended period to total $7 million.
The company is primarily involved with petroleum exploration activities in Mongolia. According to its website, the group’s assets consist of ‘Production Sharing Contracts (PSCs)’ in the following exploration blocks:
- Matad Block XX, with an area of 10,340km2 in the far eastern part of Mongolia near the Chinese border
- Bogd Block IV and Ongi Block V, adjacent to each other in west central Mongolia totalling approximately 50,000km2
Currently, the company’s biggest shareholder is Petrovis, the largest importer and distributor of petroleum products across Mongolia.
Shares in Petro Matad are up 7.25 percent as of 8.31AM (GMT).