Uzbekistan President Lends Support to Tethys' E&P Activities

Tethys reported that the President of Uzbekistan, his Excellency President Karimov, has issued an Order that includes instructions to provide support to the oil and gas activities of Tethys in Uzbekistan. The Order instructs NHC Uzbekneftegaz, the Uzbek state oil and gas company, to evaluate further expansion of cooperation with Tethys in carrying out exploration works on perspective areas and increasing oil production on existing fields.

Julian Hammond, Chief Commercial Officer of Tethys, commented, "We are very pleased to receive this support from his Excellency President Karimov in furthering our activities in Uzbekistan. The fact this Order has been issued after a relative short period of activity by the company in Uzbekistan reflects the commitment we have shown on our existing project and also the commitment to expand our activities in the oil and gas industry in Uzbekistan."

The first focus area is to support Tethys in increasing production at the North Urtabulak Oil Field in south western Uzbekistan where Tethys currently operates and produces oil under a Production Enhancement Contract ("PEC") and possibly in other fields.

Tethys' new field development well, NUR116, at the North Urtabulak oilfield, is drilling on schedule and has reached the next casing point at a depth of 2,007m (6,582 ft) with the 9 5/8 " casing about to be run and cemented. The planned TD for the well is 2,475m (8,117 ft). The NUR116 well is located in the relatively undrilled "NW Salt Zone" of the field and is being drilled for the Company by Xibu Drilling Engineering Company Limited (part of Great Wall Drilling Company) on a turnkey basis. Tethys is currently completing a dynamic reservoir model for the field, to assist in field development planning, and is in the process of introducing several new techniques to increase production including radial drilling and organic acid stimulation. Tethys believes there is substantially more recoverable oil remaining in the North Urtabulak oilfield, reported as the second largest oilfield in Uzbekistan when discovered. It is expected that the new well will be put on production immediately it is completed.

The second focus area is assisting Tethys in the area of new exploration. Tethys believes there is substantial exploration potential in Uzbekistan, including in the Ustyurt basin in Northern Uzbekistan. Tethys has recently announced a new exploration oil discovery in the Ustyurt basin in Kazakhstan which has already flowed oil from the first zone to be tested and with the results from the second zone expected some time in the next month. Tethys believes that its unique technical knowledge gained in Kazakhstan could be invaluable in any potential joint exploration work with Uzbekneftegaz in similar geology in Uzbekistan. Tethys believes the issue of this Order will facilitate discussions with the State oil and gas company and help progress toward obtaining some exploration acreage in this attractive area.