Operations Commence at Uzbek HZ Well

Tethys announced that operations had commenced on the NUR96H2 horizontal development well on the North Urtabulak oil field. This well, which is twinning a previous well which produced over 2,000 bopd prior to a mechanical failure in that well, is being drilled in what is the most prolific part of the reservoir. Operations are expected to be completed within six weeks after which it is planned to put the well on immediate production.

Work is also progressing well on the radial drilling program on the North Urtabulak field with 4 wells having now been worked on and with radial drilling about to commence on a further well. Initial data indicate a positive impact on oil production although further data is required as the radial wells clean up. This is the first time that this technique has been applied in Uzbekistan.

Background

The North Urtabulak oil field is a large mature oil field located in the Kashkadarya region of Uzbekistan. Tethys operates there through its subsidiary, Tethys Production Uzbekistan, under the terms of a Production Enhancement Contract ("PEC") with the Uzbek State oil companies.

Current gross production under the PEC is 1,216 bopd with Tethys intending to increase this production level through the radial drilling program, enhanced water injection and new wells such as the NUR96H2 well.

A Memorandum of Understanding ("MOU") was signed recently with the State oil company, Uzbekneftegaz, for Tethys to work on additional fields in Uzbekistan and negotiations are on going with respect to this.

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