Tethys Petroleum: Q1 Results

Tethys Petroleum Limited today announced its Results for the quarter ended March 31, 2015.

Q1 Financial Highlights (all figures reported in USD millions)
— Oil and gas revenue of USD5.95m (2014: USD6.78m)

— Gas revenue increased 97% to USD4.71m (2014: USD2.39m)

— Production expenses down 31% to USD2.61m (2014: USD3.79m)

— G&A expenses down 45% to USD2.82m (2014: USD5.13m)

— Loss for the period from continuing operations – USD2.03m (2014:
USD4.41m), (including restructuring and transaction expenses of
USD0.44m)

— Basic & diluted loss per share from continuing operations – USD0.01
(2014: USD0.01)

— Capital Expenditure of USD1.95m (2014: USD7.27m)

— Cash and cash equivalents of USD6.99m (2014: USD15.33m)

Q1 Operational Highlights
— Gas production up 57% to 3,173 barrels of oil equivalent (“BOE”)/day
(2014: 2,016 BOE/day)

— Highest quarterly gas production in 3 years

— Total Production up 9% to 4,368 BOE/day (2014: 4,025 BOE/day)

Q1 Corporate Highlights
— 4-year extension of the Akkulka Exploration Contract (subject to certain
routine amendments to the Contract)

— 15-year extension of the Kyzyloi Gas Production Contract

— Increase in Reserves in all boe categories as at December 31, 2014

— New Gustavson Resource(i) Economics issued

— Klymene (Kazakhstan – prospect) EMV $347 million

— Karatau (Tajikistan – lead) EMV $368 million

— USD9.5 million loan financings

— Seismic survey in Tajikistan progressing positively

— Reduction in funding obligations in Georgia and renegotiated a more
efficient new work programme with the State

(i) unrisked mean gross recoverable prospective resources

Post Q1 Highlights
— A strategic review of the business which encompasses options including
asset sales, farm-outs, financing, investments at the corporate level,
or the sale of the Company is being conducted

— Discussions have been ongoing with a number of interested parties on all
of these potential avenues

— USD7.5m convertible loan facility secured on May 15, 2015 with AGR
Energy Limited No. 1(“AGR Energy”) as we advance the strategic review

— As an option being considered as part of the ongoing strategic review,
Tethys has entered into a limited period of exclusivity with AGR Energy
to negotiate a potential larger financing. The exclusivity period runs
through to June 12th, 2015 and is subject to certain customary
exceptions

— Current average Q2 production to date is 4,807 BOE/day comprising 1,719
bopd of oil and 525 Mcm/d (18.5 MMcf/d) of sales gas.

— Current average production to date in May is 5,379 BOE/day

John Bell, Executive Chairman, commented:

“During the quarter we have significantly reduced our cost base with G&A costs down 45% and production costs down by 31% from the same period last year whilst increasing gas production by 57% and gas revenues by 97%. The fall in oil prices has obviously affected the bottom line like all our peers but the focus on increasing gas production has proven to be beneficial and has mitigated this to some extent.”

“In addition to this, we are pleased to have secured the funding from AGR to help provide greater security for, and the opportunity to grow, the company going forward. We continue the strategic review process, where we have entered into an exclusivity period for four weeks, to discuss a potential larger financing with AGR. I will update shareholders when we have further news in this important area.”

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

The Company’s First Quarter 2015 financial statements are prepared under International Financial Reporting Standards (“IFRS”).

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.