Tethys Petroleum Limited: Third Quarter 2012 Financial Results

Production Revenues Increase 46%

GRAND CAYMAN, CAYMAN ISLANDS – Tethys Petroleum today announced its third quarter 2012 financial results. The results are highlighted by a 46% increase in
production revenues over the third quarter of last year.

RECENT FINANCIAL HIGHLIGHTS
Q3 2012 vs Q3 2011
· Total Oil and Gas Revenue up 46% at USD10.0 million
· Average oil production from the Doris field, Kazakhstan up 74% at 2,732 bopd
• Administrative costs down 8% at USD4.5 million
• Total Assets USD252.1 million

9 months 2012 vs 9 months 2011
· Total Oil and Gas Revenue up 72% at USD26.7 million
· Average oil production from the Doris field, Kazakhstan up 145% at 2,234 bopd
• Administrative costs down 2% at USD15.5 million

The 9 months period in 2012 has seen a substantial increase in oil production and revenue from the Doris oil field in Kazakhstan with a small drop in corporate administrative costs over the same period. It is forecast that both these trends will continue into 4Q 2012. On the revenue side both October’s and November’s average oil production figures have so far contributed toward the best quarter of oil production in Kazakhstan to date. October oil production averaged approximately 3,700 bopd and it is forecast that Novembers’ production figures will exceed this number. These figures demonstrate the optimisation of the trucking operation in Kazakhstan is coming to fruition which has been the main restriction on maximum production to date, not the production capability of the wells.

On the costs side in Q3 the Company has initiated a review of all costs with a particular focus on administrative expenses. The objective of this exercise is first and foremost to review all areas with a view to reducing costs but particularly administrative costs, and secondly to review the categorization of costs to ensure that the Company is reporting consistently with other similar oil and gas companies, which will facilitate appropriate comparison within its peer group.

Some of these measures can be seen in a 22% reduction in the Q3 2012 costs over the Q2 2012 costs and in the 8% reduction against Q3 2011, but it is expected most of the effect will be realised in the quarters to come as this assessment and resulting action takes some time to implement. This cost reduction exercise does not in anyway reflect the growth prospects of the Company which, as can be seen from the higher production and revenue growth in Kazakhstan and the recent signing of the MOU for a Tajikistan farm-in partner, are very good.

The Company reports financial results in accordance with International Financial Reporting Standards (“IFRS”).

Source: www.tethyspetroleum.com