Turnaround at Tethys 'Well Underway'

Central Asia-focused junior oil company Tethys Petroleum said Monday that "the turnaround is now well underway" at its business, in spite of a wider loss during the second quarter of 2015 compared with a year earlier.

Tethys' revenue held up reasonably well during 2Q 2015 – $6.84 million, compared to $7.12 million in 2Q 2014 – thanks to production increasing by 21 percent to 5,204 barrels of oil equivalent per day (2Q 2014: 4,312 boepd). But the firm's loss before tax increased to $28.7 million from $3.1 million in 2Q 2014. This increased loss was due to a one-off $19.4 million charge for the depletion of properties reclassified from "assets held for sale" as well as restructuring expenses of $2.6 million.

Meanwhile, the firm said that a strategic review of the business that encompasses options including asset sales, farm-outs, financing, investments or the sale of the company as a whole is continuing. Tethys has been in discussions with a number of interested parties, including AGR Energy and Nostrum Oil & Gas. On August 10, Tethys said that a $47.4-million financing deal with AGR had fallen through, while the firm has negotiated a $5 million loan financing with Nostrum while the latter company conducts its due diligence.

Tethys Executive Chairman John Bell commented in a company statement:

"The turnaround is now well underway, some of which is reflected in these financial results. I am encouraged by the performance of the gas division and the cost reductions achieved at group level. The strategic review is ongoing, and the team is working hard to both conclude the strategic review process and continue to improve the operations."

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