Tethys announced that on April 9, 2009 it completed the acquisition from the British company Rosehill Energy Ltd ("Rosehill"), of its wholly-owned subsidiary (the "Contractor") which holds Rosehill's entire interest in the Production Enhancement Contract ("PEC") for the North Urtabulak Oil Field in Uzbekistan.
The consideration for the purchase of this project was 15 million ordinary shares in Tethys restricted from resale for periods up to one year from completion. There are certain conditions subsequent to the completion, primarily delivery to Tethys of final audited accounts for the Contractor for the year ended December 31, 2008, and it is expected that these conditions will be satisfied by the end of April. Meanwhile Tethys has taken over the running of the business of the Contractor and is working to increase further oil production from the North Urtabulak field.
Work is underway on further production enhancement both through workovers on existing wells, improvement of beam pumps etc. In addition a dedicated gas lift system is to be installed in the near future which we believe should significantly increase oil production. Tethys is also considering other development activities including further development well drilling and the potential of working on other nearby fields referenced in the PEC.
Dr. David Robson, Chairman, President and CEO of Tethys commented, "Having now had some time to work with the operating team on the North Urtabulak project and to become more closely involved in the activities on the field we are even more convinced that this project has significant potential for further increases in oil production and that this acqusition provides a core project with cash flow to develop our business in Uzbekistan.
"The country has very significant potential for oil, gas and condensate production and Tethys is one of the few independent oil and gas companies working there, and I believe the only independent oil and gas company working in three of the Republics of Central Asia. This places Tethys in a strong position to advance its strategy of creating shareholder value by building an oil and gas exploration and production company focused on Central Asia with a mix of short-term cash flow and upside potential. We believe that this acqusition is a significant step forward for the Company and establishes another core area for our business."
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