Tethys' Oman Tests Promising

Tethys Oil reported that new preliminary reserve study suggests higher condensate ratio Helix RDS (UK) Ltd., who modelled the test results from June 2007, has re-modelled the estimated resources of the Natih 'A' reservoir. The new preliminary reserve study incorporates the results of the comprehensive flow test programme and fluid sample analysis that was performed last year, where a number of gas and condensate samples were acquired from the reservoir. The 47 day reservoir pressure build up data have also been analyzed. The new Helix study derives a higher condensate to gas ratio resulting in an increase in the estimated amount of recoverable condensate resources from the reservoir. The mid-case condensate resource is now estimated at 8.75 million barrels, which is almost 34 per cent higher than the previously estimated 6.53 million barrels. For Tethys' share the mid-case condensate resource number increases from 2.6 million barrels to 3.5 million barrels.

"We are delighted that our hopes for a higher condensate to gas ratio has been confirmed with such emphasis. An increase in potential condensate resources of over 30 per cent has a material impact on the economics of the Jebel Aswad project. The next step in bringing the project forward is the drilling of Jebel Aswad-2, which will be designed to optimize production and hopefully will confirm that initial flow rates considerably above the 2,600 boepd achieved from JAS-1 are possible from the JAS structure," comments Managing Director Magnus Nordin.

Site construction for next well on Block 15 has started, rig expected in late May In March Tethys entered into an agreement with Oilex plc to utilise the drilling rig Abraj 204 to drill the next well on Block 15. The rig is currently drilling on Block 56 and it will be released to Tethys as soon as their well has been completed. The mobilization of the rig to Block 15 is expected to commence in the second half of May 2008.

The rig will be used to drill Jebel Aswad-2 (JAS-2), a step out well 1.2 km from the original Jebel Aswad-1 well. Drilling operations are expected to take 65 days including testing. JAS-2 will target the hydrocarbon producing Natih "A" reservoir on the southeastern part of the structure. Two horizontal drain holes are planned in the zone targeting high permeability fractures. Construction of a new drilling site has already commenced along with a 1.6 km. access road. The Civil Engineering Company Al-Ez has been contracted to undertake the work.

Tethys has a 40 per cent interest and is operator of Block 15 where the Company is conducting an appraisal/development program on the Jebel Aswad structure. Production from the Block is planned to commence in July 2009. On testing of the Jebel Aswad re-entry well (Jebel Aswad A1) in June 2007 the well flowed a total of 2,626 boepd (11.03 mmscfpd of natural gas and 793 bpd of 57API condensate). Danish company Odin Energi is partner holding 60 per cent interest.