Tethys Petroleum Limited announced Monday that it has received a notice from joint venture partners Total E&P Tajikistan B.V and CNPC Central Asia B.V. to withdraw from the Bokhtar exploration project in Tajikistan, after the company missed a payment on October 9 of approximately $1.28 million.
On September 23 Tethys announced that it had not yet made the payment and noted that this would need to be made by October 9 in order to avoid any negative consequences. The company also announced at that time that if binding documentation had not been entered into in connection with an interim financing deal proposed by Nostrum Oil & Gas plc by October 6, it would be very likely that Tethys would be able to make the payment within the prescribed timeframe. Tethys revealed on October 7 that Nostrum withdrew an offer to acquire the entire issued share capital of Tethys together with a proposed $20 million interim funding transaction, after Tethys' largest shareholder, Pope Asset Management, informed Nostrum that it did not support the deal.
As a result of the missed payment in connection with the Tajikistan project, Total and CNPC have stated that they jointly require Tethys' subsidiary, Kulob Petroleum Limited to completely withdraw from the joint operating agreement and assign all of its participating interests in the project to Total and CNPC in proportion to their respective participating interests. Tethys is currently exploring alternative potential financing proposals, such as a share deal proposed by AGR Energy Holdings Limited, which may result in funds shortly becoming available to remedy its missed payment and provide funding to meet future cash calls, however, there can be no certainty that any such alternative financing will be secured at this time. In the event that additional funding is secured there can also be no assurance that it will be sufficient to remedy the outstanding cash calls and fund future cash calls.
Commenting on the latest development, Tethys Petroleum said in a statement:
“Tethys is considering its position under the JOA, the contract and under applicable laws and equity and, as stated in its announcement on October 9, 2015, Tethys will use all commercially reasonable efforts to protect its interest in the Bokhtar PSC in Tajikistan.”
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