Tethys, PetroChina Ink MOU to Explore Kazakhstan's Oil, Gas Sales to China

Georgia

The Company has now signed an agreement with its partner, Georgian Oil and Gas (GOG), to remove its current funding obligations of approximately $4 million under the farm-out agreement signed in July 2013, through reducing its interest in these projects. Under the terms of the new agreement Tethys will reduce its interest to 49 percent (from 56 percent) and GOG will become Operator on the licences on Blocks XIA, XIM and XIN. In tandem with this, the partners have begun to renegotiate a more efficient new work program with the State in place of the existing work obligations and deadlines.

Kazakhstan

Gas production levels remain on target with the production level recently doubling from 2014 levels to 18.361 Bcf/d (520 MMcm/d). Work is about to commence on the AKK14 well, followed by the AKK05 well, with these being planned to be brought on stream in 2Q. These additional wells along with compressor optimization are anticipated to further increase the production level above 20.127 Bcf/d (570 MMcm/d).

Following on from the expected fall in realized oil prices for 1Q 2015 the Company confirms that it has agreed a sales oil price at the well head of $13/barrel for January and February. This is in line with similar recently reported realized prices by other Kazakh oil and gas companies. It is expected that these lower prices will continue to the end of the first quarter. These reduced price levels have less impact in the first quarter than other months due to lower forecast production levels as a result of winter weather. The forecast oil production for February and March is 1,130 barrels of oil per day (bopd) and 740 bopd respectively. The Company expects production to go back to over 2,000 bopd in May. Also, the Company is currently less reliant on oil sales than in the past due to the increase in gas volumes and pricing in early 2015, a trend the Company expects to continue in the short-term.

New Corporate Presentation

Tethys is pleased to announce that an updated corporate presentation is available on the Tethys website in the Investor Relations section. This is the first published presentation since the recent Board changes.


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