Petro Matad Continues Drilling Ops in Mongolia

Petro Matad provided an update on its exploration activities in Mongolia.

Drilling of DT-2

The drilling of Petro Matad's Davsan Tolgoi-2 well ("DT-2") is still in progress. Operations are progressing normally after delays due to mechanical problems, which have been resolved.

Currently the well is at the intermediate casing point, matching the pre-drilling prognosis, of 1,091.5 meters below surface. The intermediate section will now be logged, cased and cemented before proceeding with the remainder of the well. A further announcement will be made when the Company has reached target depth and when initial findings are known.

Analysis of 2D seismic and laboratory test results from samples taken at DT-1

As previously announced, samples from Petro Matad's DT-1 well were forwarded to Weatherford International's laboratories in the United States for reservoir and oil characterization. This work is still ongoing and results are expected to be announced in the next 3 to 4 weeks.

Blocks IV and V geophysical surveys

The 345kms of 2D seismic survey on the Company's Blocks IV and V was completed on 17 September 2010. The data from the seismic acquisition has been forwarded for processing in the US after which it will undergo interpretation by Petro Matad's technical team. The infill gravity survey is ongoing.