Tethys Oil Closes Acquisition of Block 15 Onshore Oman

Tethys Oil has closed the previously acquisition of a 40% interest in Block 15 onshore Oman. Block 15 contains two discovery wells and estimated oil in-place of more than 50 million barrels, with an expected recovery ratio of between 5 and 20%.

The acquisition has been carried out through a corporate transaction whereby Tethys Oil AB has acquired all the outstanding shares of GotOil Resources (Oman) Ltd. from Maha Resources Ltd. GotOil Oman holds a 40% interest in Block 15. The remaining 60% are held by Danish private company Odin Energi A/S.

As consideration for the transaction Tethys has paid US $600,000 cash and issued 400,000 new shares of Tethys to Maha. In addition Maha will receive an overriding annual cash remuneration of the total profit hydrocarbon entitlement due GotOil Oman of 3%.

Maha is controlled by Jonas Lindvall, who was elected to the Board of Directors of Tethys on May 19, 2006. Jonas Lindvall is a petroleum engineer educated in Tulsa, Oklahoma. He has more than 15 years experience of drilling for oil and natural gas. Lindvall is employed by GotOil Oman as managing director and will maintain this position and run the Omani project for Tethys. He is previously under contract with Tethys to manage the drilling of the Karlebo well onshore Denmark.

Tethys has in addition received options to acquire a 30% interest in an exploration concession on the Swedish island of Gotland and an 11% interest in the Dunalka production license onshore Latvia. The options expire in November 2006 and Tethys will evaluate these opportunities in the coming months.

Tethys Oil is a Swedish company focused on exploration for and production of oil and natural gas. Tethys aims to maintain a well balanced portfolio of high risk/high reward exploration opportunities coupled with lower risk exploration and appraisal/development assets. The company has interests in exploration licenses in Denmark, France, Morocco, Spain and Turkey and in a production license in Spain. The shares are listed on Nya Marknaden (TETY) in Stockholm.