Half Year Results

08 August 2013

Matra Petroleum plc

("Matra" or the "Company")

Half Year Results 

Matra Petroleum plc, the oil and gas Investing Company, today announces its results for the six-month period ending 30 June 2013.

Highlights

Operational

·; Successfully completed 2D and 3D seismic survey on the Sokolovskoe Field

·; Average production from the Sokolovskoe Field of 126.4 bopd

Corporate

·; ALLTECH introduced as a cornerstone investor

·; Negotiated and completed the sale of the Arkhangelovskoe Licence for a consideration of up to $35 million

·; On 1st July 2013 Matra became an Investing Company for the purposes of the AIM rules

Financial

·; Revenue from production from the Sokolovskoe Field was $ 0.28 million in the period

·; Cash or cash equivalents of $2.36 million as at 30 June 2013

·; $25 million ( £16.4 million) raised from sale of Arkhangelovskoe Licence

·; Cash or cash equivalents of $26.1 million as at 31 July 2013 (Post completion of Arkhangelovskoe Licence disposal)

Implementing the Investment strategy

·; Primarily onshore or near shore oil and gas assets, in existing proven hydrocarbon basins, with production potential and exploration / appraisal upside

·; Initial geographic focus on Russia and CIS also potentially Latin America and the USA

·; Focus on politically and fiscally stable countries favourable for investors

·; Aim to develop a balanced portfolio with production, appraisal and exploration potential

Maxim Barskiy, CEO, commented:

"The completion of the sale of the Arkhangelovskoe Licence was a significant achievement for Matra in the first half of this year and has considerably strengthened the Company's balance sheet, leaving us better placed to make a value accretive acquisition. We continue to undertake due-diligence on several opportunities and I remain very positive about Matra's outlook."

For further information, please contact:

Matra Petroleum plc c/o Pelham Bell Pottinger

Henry Lerwill 020 7861 3169

Canaccord Genuity Limited

Henry Fitzgerald-O'Connor 0207 523 8000

Company Number 5375141 (England & Wales)

MATRA PETROLEUM PLC

INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2013

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONTENTS

Page

Directors, secretary and advisers 2

Chairman's Review 3

Independent Review Report 4

Consolidated Income Statement 6

Consolidated Statement of Comprehensive Income 7

Consolidated Statement of Changes in Equity 8

Consolidated Statement of Financial Position 9

Consolidated Statement of Cash Flows 10

Notes to the Consolidated Interim Financial Statements 11

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

DIRECTORS, SECRETARY AND ADVISERS

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

Dear Shareholder,

The first half of 2013 has been one of great activity for Matra as we have consolidated our financial position through the sale of the Arkhangelovskoe Licence and continued to make progress in assessing potential acquisitions.

We completed the seismic survey on the Sokolovskoe Field in March this year, which showed the field to be more complex than previously thought. The Board recognised the potential cost and risk implications of this increased complexity hence the company elected to seek a buyer for the asset who would be better suited to developing this type of asset. Following a competitive process, we were delighted to receive an offer with a potential total consideration of $35 million which represented compelling value for shareholders. This transaction was overwhelmingly approved at the Company's General Meeting in June.

The completion of the sale shortly after reporting period-end has significantly strengthened the Company's balance sheet as we continue to search for an acquisition which fits our strategy to build a mid-sized E&P company. Our primary focus is to invest in those opportunities where the company's relationships, track record and particular skill base potentially provide it with a competitive edge. The type of assets we will be looking at are onshore or near shore oil and gas assets, in existing proven hydrocarbon basins, with current or near term production potential and with exploration and/or appraisal upside.

In the first half of this year we also welcomed the ALLTECH Group as one of the cornerstone investors in the Company. They share the Board's vision for Matra and we are grateful for their on-going support.

We look forward to updating shareholders in the coming months as we move forward with our strategy to create a mid-sized E&P company. As ever, I am very grateful for the hard work of everyone in the Company in what has been a transformational six months.

James William Guest

Chairman

8 August 2013

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

INDEPENDENT REVIEW REPORT TO MATRA PETROLEUM PLC

Introduction

We have been engaged by the company to review the financial statements in the half-yearly financial report for the six months ended 30 June 2013 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of financial position, the consolidated statement of cash flows and the related explanatory notes.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the half-yearly financial statements.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Our responsibility

Our responsibility is to express to the company a conclusion on the set of financial statements in the half-yearly financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the financial statements in the half-yearly financial report for the six months ended 30 June 2013 arenot prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

BDO LLP

Chartered Accountants and Registered Auditors

Location

United Kingdom

8 August 2013

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONSOLIDATED INCOME STATEMENT

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

*Items that may be reclassified to profit or loss.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The financial statements were approved and authorised for issue by the Board on 8 August 2013 and signed on their behalf by

Chief Executive Officer

Maxim Barskiy INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONSOLIDATED STATEMENT OF CASH FLOWS

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. Basis of Preparation

The consolidated interim financial statements of Matra Petroleum plc (the "Company") for the six months ended 30 June 2013 comprise the Company and its subsidiaries (together referred to as the 'Group'). The corresponding amounts are for the year ended 31 December 2012 and the six month period ended 30 June 2012.

These consolidated interim financial statements have been prepared in accordance with the rules of the London Stock Exchange for companies trading securities on Alternative Investment Market and on a basis consistent with the accounting policies and methods of computation as published by the Group in its annual report for the year ended 31 December 2012, which is available on the Company's website. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2012 Annual Report.

The financial information for the half years ended 30 June 2013 and 30 June 2012 is unaudited, but was the subject of an independent review carried out by the Company's auditors, BDO LLP.

The annual financial statements of Matra Petroleum Plc are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The comparative financial information for the year ended 31 December 2012 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2012 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2012 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated financial statements.

The same accounting policies, presentation and methods of computation are followed in these financial statements as were applied in the Group's latest annual audited financial statements except that in the current financial year the Group has adopted a number of revised Standards and Interpretations. However, none of these has had a material impact on the Group's reporting. In addition, the IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report

Restatement - Change in presentation currency

The Directors have elected to present for the first time the Group's financial statements for the year ended 31 December 2012 in US Dollars in order to make them comparable with the financial statements of its peers. The change represents a change in accounting policy and has been applied retrospectively. Consequently, the comparative information for the half-yearly period ended 30 June 2012 previously presented in Euros has been restated to reflect the change.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

2. Discontinued operations

On 28 June 2013 the Company disposed of its 100% interest in Matra Cyprus Petroleum Limited which owns 100% of the share capital in OOO Arkhangelovskoe for a potential total consideration of US$35 million of which US$25 million was received on 1 of July 2013 with the remaining US$10 million to be received on 1 April 2014 conditional upon the outcome of the drilling works to be carried out by the buyer by 1 April 2014. Should the drilling results not meet the specified criteria then the final consideration will be US$1.

At the date of this report the outcome of the drilling results remains highly uncertain and no contingent consideration has been recognised when determining post-tax gain on disposal of discontinued operations.

The post-tax gain on discontinued operation has been determined as follows:

* The US$1.9 million release of cumulative translation reserves represents the previously capitalised translation gains and losses attributed to the interest sold.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

______________________________________________________________________________

2. Discontinued operations (continued)

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

______________________________________________________________________________

3. Loss from operations

Loss from operations consist of administrative expenditure of Matra Petroleum plc and its subsidiary Matra Cyprus Petroleum (Alpha) Limited. Loss from operations of the disposed subsidiaries Matra Cyprus Petroleum Limited and OOO Arkhangelvoskoe is shown separately in the note 2.

The significant decrease of US$1,334,000 in the administrative expenditure for the six-month period ended 30 June 2013 (H1 2012: US$1,774,000) is attributed to a decrease in the staff costs and reversal of the warrant.

The decrease in the staff costs is attributed to the termination payment of US$569,700 (€399,116) to Peter Hind, former Managing Director, made May 2012.

In May 2013 the warrants granted to Maxim Barskiy lapsed as the qualifying vesting conditions have not been met. The previously recognised share-based payments charge of US$599,000 has consequently been reversed.

4. Options granted

On 28 June 2013 the Company granted 179,722,824 options at an exercise price of 0.85 pence per share to its directors and employees in recognition of the sale of Arkhangelovskoe Licence. The options were granted to executive directors and employees under Matra's Enterprise Management Incentive Scheme and non-executive directors were granted unapproved options. 50 per cent of the options for executive directors and employees vest on the first anniversary of the date of grant and the remaining 50 per cent vest on the second anniversary of the date of grant. Options for non-executive directors vest in 3 equal tranches on the anniversary of the date of grant over a three year period.

Where options are exercised the Board may in its absolute discretion determine to vary the number of options and the exercise price such that the option holder is in the same position but dilution is reduced.

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

5. Loss Per Share

Loss per share of is calculated by dividing the earnings/ (loss) attributable to ordinary shareholders for the period by the weighted average number of ordinary shares outstanding during the period.

The effect of all potential ordinary shares arising from the exercise of options going forward is considered to be anti-dilutive and therefore diluted earnings per share has not been calculated. At the reporting date there were 188,922,823 potentially dilutive ordinary shares.

6. Interim Report

Copies of this interim report for the six months ended 30 June 2013 will be available from the offices of Matra Petroleum plc, 101 Finsbury Pavement, London, EC2A 1RS, United Kingdom and on the company's website www.matrapetroleum.com.