Tethys has signed a Memorandum of Understanding ("MOU") with the Uzbek State oil and gas company, National Holding Company "Uzbekneftegaz" ("UNG") establishing a program for Tethys to obtain two new Production Enhancement Contracts ("PECs") on two existing oilfields in Uzbekistan.
The MOU represents an agreed timetable up to May 1, 2012 to negotiate for two new PECs one for the Chegara Group of fields and one on the West Kruk field. The PECs are expected to be a similar contractual arrangement to the PEC that Tethys has over the North Urtabulak Field in Uzbekistan that has operated successfully for some 10 years. The Chegara and West Kruk fields are located in the same area as North Urtabulak. Under this contract Tethys is allocated refined products for the oil it produces and sells these on the export market in United States dollars. The Chegara Group of fields is less developed than North Urtabulak and Tethys believes that these fields give significant potential for additional oil production in the short term.
Mamuka Murjikneli, Regional Manager, commented, "This MOU is an excellent step forward with our partners Uzbekneftegaz to work on more oil fields in Uzbekistan. Given the experience and expertise Tethys has in Uzbekistan and the region this offers a real opportunity to add to Tethys' existing portfolio of high impact projects. These additional fields can be developed in conjunction with our currently producing North Urtabulak oil field increasing our short to medium term oil production base and cash flow in Uzbekistan."
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