Operational Update and Board Change www.petromatadgroup.com

Petro Matad, the AIM quoted Mongolian oil explorer is providing an operational update:

Highlights
• The Farmout process has advanced, and a number of potential partners are going through internal approval processes, with decisions expected in 4Q 2017 or 1Q 2018.
• Management, as well as all potential farm out partners, believes that a 3D seismic programme will enhance the farmout process, while de-risking and growing our portfolio of drillable prospects.
• A comprehensive 3D seismic programme will now commence shortly; defining and high grading drilling targets within the Tugrug Basin, Block V. Additional 2D seismic data will also be acquired
• The Company has no plans to draw down further from its current financing facility, as its 3D seismic programme is fully funded
• The contracted SINOPEC rig has been undergoing inspection and certification, and while this process is still ongoing, the rig will not achieve full certification in time to undertake the planned drilling programme in 2017
• An expected three-well exploration drilling programme is planned to commence in Spring 2018
• The Board is re-structuring the executive management of the company

Funding / Farmout
The farmout process continues and a number of companies remain in active dialogue with management. These potential partners appear to be more willing to fund a strategy where additional seismic is acquired before a drilling campaign is undertaken. Several potential farminees have expressed a clear preference to de-risk certain prospects in the Tugrug basin using 3D seismic and better defining a number of stratigraphic 'leads' that have so far only been identified on 2D seismic data. They may also be better positioned to farm-in once their 2018 exploration budgets have been established, which could occur as early 4Q 2017. The Company remains optimistic with regards to bringing in a farm-in partner, as without exception, every company that has reviewed the opportunity has responded with very enthusiastic comments regarding the hydrocarbon potential of the licences.

As the Company is fully funded for its current seismic work program, it has no plans to make further drawdowns from its finance facility.

Seismic Campaign
The 3D seismic campaign will be focused on the Tugrug basin, in Block V and high graded drilling targets within this basin. The 3D seismic will also, help identify stratigraphic traps which have significant potential in analogous basins such as the Vandana discovery in the Barmer Basin, India and the Sea Lion field in the North Falkland Basin; both having multi billion barrels of oil in place.

Additional 2D seismic will be shot to high-grade several other basins to add more drillable prospects to the Company's growing prospect inventory. The decision to acquire 2D seismic data over several new basins is again influenced by feedback from potential farminees, who have expressed interest in these areas as potential future exploration targets.

Drilling Campaign - Irves-1 (Snow Leopard)

Snow Leopard's target depth of 3150 meters will represent the deepest well ever drilled in Mongolia. As such, considerable time has been spent by Petro Matad to ensure that it has a rig capable of delivering the defined drilling programme, conducting it safely and in full compliance with international standards. The Sinopec rig that was contracted to undertake the planned drilling programme has been undergoing extensive inspection and certification at its current location in Block 97, Mongolia. Under the contract the rig was required to be fully certified, and the well spudded by 15 September 2017. Whilst Sinopec are still in the process of obtaining certification, this work will not be completed before October 2017, and as a consequence there will be insufficient time to mobilise the rig and complete the drilling programme before winter conditions set in. As Sinopec have been unable to fulfil their contractual obligations, Petro Matad has served a notice of default on Sinopec and has entered into discussions with Sinopec on potential remedies. Depending on the outcome of these discussions, the Company will either terminate the contract and issue a new tender for a 3-well programme commencing in the first half of 2018, or continue with Sinopec as drilling contractor, in the event the rig is certified and adequate concessions are obtained.

While it was not the desired outcome, this postponement of the drilling programme will, however, allow Petro Matad to enhance its drilling portfolio via the acquisition of a 2D and 3D seismic programme, which is set to begin shortly. While the reason for delaying the drilling programme is related to the preparedness of the rig, it does also serve to improve the position of the Company with respect to a potential farmout. These potential partners have expressed a preference to participate in a multi well drilling program next year and to provide input into target selection and the order of drilling. A back to back multi well program in one season would also significantly reduce our drilling costs.

Management re-structuring

The Board of Petro Matad is implementing a strategy to re-structure the company's executive management to bring onboard senior executives with proven operational and commercial track record. Petro Matad has significant milestones to deliver on concluding the farm out, carrying out a multi well drilling campaign in 2018 and executing a multi year exploration and development work program. Mr Ridvan Karpuz, CEO will be stepping down from his position in mid-October and continue thereafter as a technical consultant. The search for a successor has already been initiated and is progressing well.

The Company is pleased to announce the hiring of Nick Cousyn as Chief Communications Officer, who will lead our Public and Investor Relations effort. Mr. Cousyn brings with him 18 years of public markets experience and has spent the last 5 years in Mongolia as BDSec JSC's Chief Operating Officer. His focus over the last 5 years has been in Capital Markets, M&A and Corporate Advisory.

Enkhmaa Davaanyam, Chairman of Petro Matad, commented:
"Good progress has been made on discussions with a number of potential farm-in partners and it is very reassuring that all the companies have responded favourably to the technical potential and scale of our licences.

While we are disappointed not to be able to drill in 2017, the opportunity to high grade additional drilling targets ahead of a rescheduled 3-well drilling campaign in Spring 2018 is clearly beneficial to the long-term value potential of the business and our ability to secure a farm-in partner.

I would like to thank Ridvan for his hard work and significant contribution to Petro Matad and wish him well in his future endeavours. We have initiated a search process for a new CEO and we are already progressing well and I look forward to updating the market once the candidate is in place."

BoM issues 1-week bills www.mongolbank.mn

The Bank of Mongolia traded 612.2 billion MNT worth 1-week maturity central bank bill (“CBB”), with weighted average yield of 12.0 percent per annum. 

Mongolia joins global alliance for torture-free trade www.montsame.mn

Ulaanbaatar /MONTSAME/ Ahead of the 72nd regular session of United Nations General Assembly, the European Union, Argentina and Mongolia co-lunched the initiative Global Alliance for Torture-Free Trade on September 18 at the UN Headquarters in New York, USA.

Monetary policy statement: Keeping the policy rate unchanged www.mongolbank.mn

The Monetary Policy Committee meeting was held on 15 September 2017, and it was decided to keep the Policy rate unchanged at 12 percent.

As of August 2017, annual inflation measured by the consumer price index has reached 5 percent nationwide and 5.4 percent in Ulaanbaatar city. In the first half of this year, growth of the Mongolian economy exceeded forecasts and reached 5.3 percent (on annual basis). Furthermore, economic growth is expected to accelerate and inflation is expected to stabilize around the medium term target rate of 8 percent.
Mongolian economy is currently stimulated by improved external demand, relatively high prices of the major export commodities and increased investments in the mining sector. While the Bank observes positive changes in market sentiment and positive trends in economic activities, further prospects are highly conditional on export prices and volume.
The Bank’s decision to maintain the policy rate unchanged is consistent with its mandate to stabilize inflation around the target rate and thereby facilitate the stability of macroeconomic environment in the medium to long run.
Extracts of the meeting minutes will be released in two weeks on the Bank of Mongolia’s website.

MSE market cap hits 2 trillion mark www.mse.mn

On September 18, 2017, 338,753 securities worth MNT 645,889,989 were traded on the MSE.

Trade between Russia & China booming – Chinese ambassador to Russia www.rt.com

Russia and China have seen a 25 percent expansion in mutual trade in the first seven months of the year, as business links between the countries continue to grow.

O.Erkhemjargal: Customers can make an appointment for certain visa permit services www.gogo.mn

The Mongolia Immigration Agency (MIA) has promoted a goal of “Online Immigration Service” in 2017, under this goal the agency has initiated services which would make the service more timely and consistent with an international standard. This time, the Mongolia Immigration Agency is implementing “Telephone appointment service” and we have interviewed Mr. Erkhemjargal, information officer of the MIA, regarding the new service.
-That is the first time that the government agency has applied “Telephone appointment service” in Mongolia. Please provide detailed information about the service. 
-High technology is being widely used worldwide. At the same time, our agency is implementing “Telephone appointment service” starting from 15th September, which applies to international standard. Our customers can ask an appointment to a certain type of visa permit service via telephone, without waiting in a queue.
In the first stage, the service is covering foreign investors, educational field clients such as students and teachers as well as an inter-governmental organization customers.
The MIA customers are foreigners and mainly foreign investors, businessmen and applicant form an educational arena among them. Thus, the service is up-to-date as it not only saving the time of customers but also reducing the state service burden. On the other hand, it can be one way to attract foreign investors. Since the customer made an appointment, one does not have to wait in line to apply, which makes customers more satisfied with the service. On top of that, the Mongolia Immigration Agency is quite far from the city center. Regarding those circumstances, we have executed the service which could be time and economic friendly.
-How can we make an appointment? What are the requirements for customers?
-Customers can make telephone appointment by making a call to information center 1800-1882 and the appointment due time could be up to 1 (one) month. The customer can apply for the MIA service in the prearranged time and if the customer didn’t arrive on time, the appointment shall be canceled. More importantly, customers who are making an appointment must bring proper and complete documents in compliance with applicable laws and regulations, as inquiring from the information center and from our website. There are common incomplete documents as having no photographs and filling out application form incomplete.

We only receive complete documents for visa permit and issue the service within timeline in accordance with laws and regulations. Having an appointment with unprepared and incomplete documents is certainly avoidable. Due to lack of documents, service could become complicated as the customer need to come over again. Therefore, I strongly advise to our customers to increase one’s responsibility for not having a difficult situation for themselves.
Finally, I would like to highlight that the service is not decision-making period, but to check the completeness of the visa permit documents during the given time.
-How would the Mongolia Immigration Agency provide service for those who do not have the appointment?
-The MIA would provide service normally for those customers with line numbers issued in service hall. “Telephone appointment service” does not mean all customer must make an appointment for applying for visa permit. Accordingly, the state service will proceed typically in working hours as before.
-What are the new services that the MIA planning to launch in the near future?
-The Mongolia Immigration Agency’s goal of this year is “Online Immigration Service”. Furthermore, we would continue working to provide online services in compliance with an international standard. For example, our agency will test online visa permit service from September 20, 2017. This service would check whether applicant’s documents are complete or not, and more importantly, it would save the time of our customers. If the examination can be conducted successfully, we will continue working on the improvement of more online services. 
-Thank you.

Development Bank and Export Development project established cooperation memorandum www.montsame.mn

Ulaanbaatar /MONTSAME/ The Export Development Project aimed to help small- and medium-sized enterprises in non-minerals sectors strengthen their export capabilities and boost their access to export markets has being implemented since this March. A cooperation memorandum between the Project implementing unit and the Development Bank of Mongolia was signed on September 18.

Mongolia aims to receive 1 million tourists www.montsame.mn

Slack valued at $5.1 billion after new funding led by SoftBank www.reuters.com

(Reuters) - Software startup Slack Technologies Inc said it raised $250 million from SoftBank Group Corp (9984.T) and other investors in its latest funding round, boosting the company’s valuation to $5.1 billion.