Source: Petro Matad Limited                           Date: 21 September, 2010

Petro Matad has announced it is conditionally raising up to USD46.8 million before expenses through a placing and subscriptions for up to 22,483,878 new shares, primarily to accelerate its drilling program on Block XX in Mongolia. It has already received commitments to subscribe for 13,640,203 placing shares, raising approximately USD28.4 million.  The group will also issue up to 8,843,675 new shares through direct subscriptions.

In addition to the fundraising, the European Bank of Reconstruction and Development (EBRD) which at the end of 2009 took 17.5 percent stake in the company for a USD6 million investment, will have the right to subscribe to as many shares as required to maintain its stake in Petro Matad. The EBRD is able to subscribe for all or part of its entitlement and its right to subscribe on these terms will expire on 11 October 2010.  A further announcement of the EBRD's intention will be made by the Petro Matad in due course.

Regarding the accelerated exploration of block XX, the group now intends to test all three wells in its, instead of the single test that was previously budgeted in 2010.  Weather permitting, Petro Matad plans to drill a fourth well as well in Davsan Tolgoi in 2010. The group also plans to immediately commission further seismic surveys in other parts of Block XX.

Petro Matad is the parent company of a group focused on oil exploration, as well as future development and production in Mongolia. The group holds the sole operatorship of three production sharing contracts with the Government of Mongolia. The principal asset is the PSC for Block XX, a petroleum block of 14,250 sq km in the far eastern part of the country.  The two other blocks, IV and V are located in central Mongolia and jointly cover 71,040 sq km.