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Press Release: Tethys Petroleum Press Release: -2-

3 Apr 2017 6:00 am
          -- 44m shares issued to each of Prax Pte Ltd, and Jin Guang Ltd in 
             November 29, 2016 at USD0.01593 per share in cash; 
 
          -- 20m shares issued to Annuity and Life Reassurance Limited in 
             December on prepayment of USD0.3m of debt at USD0.01593 per share; 
 
 
 
   -- Cash and cash equivalents at December 31, 2016 were USD0.4m (2015: 
      USD3.3m) although there was an additional USD2.6m of restricted cash 
      which became available to the Company in January 2017. 

Reserve Highlights
   -- Total Gross (i.e. before the application of Kazakh Mineral Extraction 
      Tax) Oil and Gas Reserves consisting of "Proved" 1P reserves of 12.17m 
      boe (2015: 13.18m boe) and "Proved plus Probable" 2P reserves of 22.90m 
      boe (2015: 23.97m boe); 
 
   -- The NPV10 value after tax of the Company's Kazakh reserves (Proved plus 
      Probable) as at December 31, 2016 was USD157.6m (2015: USD183.6m); 
 
   -- The reserves in this press release are estimated with an effective date 
      of December 31, 2016. 

The reserve report was prepared by Gustavson Associates in full accordance with the requirements of National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators. The Company's 2016 Annual Information Form dated March 31, 2017 includes more detailed disclosure and reports relating to petroleum and natural gas activities for 2016. Both oil and gas reserves are based on availability of sufficient funding to allow development of the known accumulations. The estimated value (NPV10) of the reserves does not represent fair market value.

A barrel of oil equivalent ("boe") conversion ratio of 6,000 cubic feet (169.9 cubic metres) of natural gas = 1 barrel of oil has been used and is based on the standard energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Outlook

The Company's objective is to become a leading oil and gas exploration and production Company in Central Asia, by exercising capital discipline, by generating cash flow from existing discoveries and by maturing large exploration prospects within our highly-attractive frontier acreage. The Company produces both oil and natural gas in order to balance its product portfolio and currently operates in three separate jurisdictions in Central Asia and the Caspian Region, though the Board is considering farming down or selling the Tajikistan and Georgian assets to focus on the assets in Kazakhstan. The Company was served with a withdrawal notice from its partners in Tajikistan during 2015 although is contesting this in arbitration proceedings.

The Company's long-term ambition is to achieve a significant role in the production and delivery of hydrocarbons from the Central Asian region to local and global markets, especially to the Chinese market. In common with many oil and gas companies, in implementing its strategies, the Company regularly considers farm-out/farm-in and joint venture opportunities and new projects which provide synergy with the Company's activities. Meanwhile, the specific focus of management in the short term is to:
   -- resolve the Company's current issues in Kazakhstan, including disputes 
      with EGG and Olisol; 
 
   -- work with the Company's new partner in Kazakhstan to market the Company's 
      oil and gas for better pricing and obtain funding from a Kazakh bank to 
      restructure loans and fund operations; 
 
   -- complete the process of restructuring the Company's loans which are 
      falling due in 2017; 
 
   -- seek drilling company partners, or other investors, to fund drilling in 
      the Company's licence areas in Kazakhstan on a deferred payment or 
      contingent production sharing basis. This would include shallow and deep 
      gas targets, Akkulka enhanced oil recovery and the Klymene exploration 
      well on the Kul-bas licence; 
 
   -- continue to evaluate farm-out or other value realisation opportunities 
      with respect to Tajikistan and Georgia; 
 
   -- continue to review and implement further restructuring and cost 
      optimisation across the business; and 
 
   -- maintain and increase shallow gas production in the near-term and drill 
      for deep gas in the medium-term with the objective to supply gas to China 
      through the newly built pipeline, once operational and additional funding 
      is secured. 

Full Annual Results and other documents

The full Annual Results together with Management's Discussion and Analysis and Annual Information Form will be filed with the Canadian securities regulatory authorities. Copies of the filed documents may be obtained via SEDAR at www.sedar.com or on Tethys' website at www.tethyspetroleum.com. The summary financial statements are attached to this press release.

The Company's 2016 Consolidated Financial Statements are prepared under International Financial Reporting Standards ("IFRS").

We draw attention to the section entitled "Going concern" in note 1 to the Consolidated Financial Statements which describes the material uncertainties relating to the Company's adoption of the going concern basis in preparing the Financial Statements for the year ended December 31, 2016 that may cast significant doubt about Tethys Petroleum Limited's ability to continue as a going concern.

About Tethys

Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

Disclaimer

Some of the statements in this document are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of the Company or its officers with respect to the potential that exists in both exploration and in discovered deposits in Central Asia and the Caspian Region, the savings to be achieved under the cost optimisation programme, the outcome of the appeal regarding allegations made against employees of Tethys Aral Gas LLP, the Company's plans to relocate its main administrative office in Kazakhstan from Almaty to Aktobe City, the outcome of legal action against Olisol, EGG and certain of their respective principals, the Company's plans to cancel its listing in the United Kingdom and combine its United Kingdom share register with its Canadian register, the cost, timing and success of the proposed shallow gas drilling programme in adding 12 new wells to production, the timing of installation and success of the mini compressor in enhancing gas production, the availability of sufficient funding to allow development of the known accumulations described above under "Reserve Highlights" and the Company's objectives, ambitions and short-term focus areas described above under "Outlook". When used in this document, the words "expects," "believes," "anticipates," "plans," "may," "will," "should" and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements including risks and uncertainties with respect to the potential that exists in both exploration and in discovered deposits in Central Asia and the Caspian Region, the savings to be achieved under the cost optimisation programme, the outcome of the appeal regarding allegations made against employees of Tethys Aral Gas LLP, the Company's plans to relocate its main administrative office in Kazakhstan from Almaty to Aktobe City, the outcome of legal action against Olisol, EGG and certain of their respective principals, the Company's plans to cancel its listing in the United Kingdom and combine its United Kingdom share register with its Canadian register, the cost, timing and success of the proposed shallow gas drilling programme in adding 12 new wells to production, the timing of installation and success of the mini compressor in enhancing gas production, the availability of sufficient funding to allow development of the known accumulations described above under "Reserve Highlights" and the Company's objectives, ambitions and short-term focus areas described above under "Outlook".

No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company or any other entity, and shareholders of the Company are cautioned not to place undue reliance on the forward-looking statements. Save as required by the Listing Rules and applicable law, the Company does not undertake to update or change any forward-looking statements to reflect events occurring after the date of this announcement.

See our Annual Information Form for the year ended December 31, 2016 for a description of risks and uncertainties relevant to our business, including our exploration activities.
 
 
Tethys Petroleum Limited 
Consolidated Statement of Financial Position 
(in thousands of US dollars) 
                                        2016       2015 
-----------------------------------   ---------  --------- 
Non-current assets 
Intangible assets                        42,732     64,202 
Property, plant and equipment           103,115    113,397 
Restricted cash                           2,238      2,233 
Investment in joint arrangements              4          4 
Trade and other receivables               1,237      2,457 
Deferred tax                                208        226 
------------------------------------  ---------  --------- 
                                        149,534    182,519 
Current assets 
Cash and cash equivalents                   449      3,272 
Trade and other receivables               6,532      3,710 
Inventories                                 676        879 
Restricted cash                           2,713        215 
------------------------------------  ---------  --------- 

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