GRAND CAYMAN, CAYMAN ISLANDS–(Marketwired – April 10, 2015) – Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) (“Tethys” or the “Company”) has provided a corporate update to shareholders.

Highlights:

Q1 2015 gas production achieved was the highest quarterly gas volume in the last three years.

First sales under the new gas contract completed.

Tethys continues to actively progress the SinoHan transaction to completion through seeking to close the conditions precedent that are required prior to concluding the transaction, including the Kazakhstan Ministry of Energy’s approval.

In parallel, the Company is proactively developing a number of strategic options in the event the SinoHan transaction does not complete, with the intention of considering all opportunities for maximising value for shareholders.

US$3.5 million loan financing has now closed and funds have been received in March.

New compelling prospective resource economics issued for Klymene in the Kul-Bas Contract, Kazakhstan; and Karatau in Tajikistan.

Planned workovers of the AKK14 and AKK05 wells to commence shortly, targeted at growing gas production.

Substantial operational and overhead cost reductions continue.

Currently conducting tenders and/or finalising contracts for drill projects and 3D seismic in the Kyzyloi and Akkulka areas.

Seismic survey in Tajikistan now underway after winter break.

In Tajikistan, the Bokhtar Operating Company has started implementing the recently agreed cost reductions.

Updated work programme agreed in Georgia.

John Bell, Executive Chairman, commented: “In a short time we have achieved some notable gains for the business including two key contract extensions, a higher gas price, the doubling of gas production, increased reserves in all categories, and intensive corporate cost cutting that has made us more efficient and better positioned to deal with the lower oil price environment. The positive financial effect of these will be seen for the first time in our Q1 2015 results to be delivered next month. We have also delivered on our gas production targets safely in Q1 and expect further increases to production when we bring additional wells on line.

We continue to work hard on progressing the SinoHan sale towards completion but we do not as yet have the Kazakhstan Ministry of Energy’s approval for the transaction. Not only would this US$75million investment recapitalise the Company, it would retain and create jobs and increase international investment in Kazakhstan and in its growing oil and gas industry. We believe the benefits arising provide compelling rationale for the Ministry to provide approval.

If this transaction does not conclude we still have a 100% stake in highly attractive assets that have generated significant industry interest and ones I believe have substantial upside.

Looking to the future, this is an asset where we are continually increasing gas production adjacent to a newly constructed gas pipeline to China, which will soon become operational. We have additional prospects to drill which should further add to our production, in areas where we have had a very high exploration success rate to date, and where we grew independently-assessed reserves in 2014. We also have material oil exploration prospects across the rest of our portfolio, in particular the Klymene Prospect where we are targeting over 400 MMbbls of unrisked mean prospective resources with compelling economics.

The Company has a number of potential catalysts ahead to deliver shareholder value: the commencement of product sales into China next year, drilling of the Klymene exploration well, and completion of the farm down of one or more assets while maintaining a material interest and identifying the first prospect for drilling in a significant exploration portfolio.”

SinoHan Transaction

On 1st November 2013 Tethys entered into a legally-binding exclusive agreement for the sale of 50% of its Kazakh oil & gas assets to SinoHan Oil and Gas Investment Number 6 B.V. (“SinoHan”), part of HanHong, a Beijing, PRC based private equity fund, for US$75 million. The Company has been actively progressing the completion of the conditions precedent (“CPs”) that are required prior to concluding the SinoHan deal. However, the Company is still awaiting the Ministry of Energy’s approval. This process commenced 13 months ago and with 3 weeks remaining until the Longstop date of 1st May 2015, there is the possibility that if approval is not received imminently, there would not be sufficient time to complete the final CPs under the agreement with SinoHan. As a result, the Company would not be able to conclude the US$75 million transaction for the sale of 50% of the Kazakhstan assets and will retain its 100% interest.

Current Financial Position

As previously disclosed in the event that the SinoHan transaction does not complete, the US$3.88 million deposit advanced by SinoHan in the form of a short term loan will become repayable within 10 days upon request by SinoHan. Furthermore, an amount of up to US$0.70 million would also be payable to SinoHan in the event that the CPs are not met or waived by the Longstop date and the Buyer has complied with its obligations.

Unless the Company obtains additional alternative funding, it will not be able to meet these obligations nor will it be able to meet its full contractual obligations under the Tajik Bokhtar Production Sharing Contract (“PSC”) and Kazakh Exploration and Production Contracts. Further information was provided in Note 2 of the Company’s recently published 2014 Consolidated Financial Statements.

The inability of the Company to access sufficient capital for its operations could have a material adverse impact on the Company’s financial condition, results of operations, prospects and ability to continue as a going concern.

Alternative Plans

The Company has been proactively developing contingency plans should the SinoHan transaction not complete. The Company is actively reviewing a number of alternatives, including a further scale down of the business, an equity financing, a debt refinancing, and a sale or farm down of certain assets. The Company’s review may also include possible business combinations. Although the Company has initiated a review of alternatives, there is no certainty that any transaction or alternative will be undertaken. The Company has not set a definitive schedule to complete its review and, notwithstanding the above-mentioned alternatives, no decision on any particular alternative has been reached at this time. The Company will update the market in due course on these alternative strategic initiatives. The Board of Directors of the Company intends to focus on courses of action that it believes will maximize shareholder value in the shortest time frame.

US$3.5 million Loan Financing Closed

The Company confirms that it has received funds on time for the recently announced US$3.5 million loan facility. The warrants associated with this financing have also been issued.

New Prospective Resource Economics

Gustavson Associates (“Gustavson”) have completed, as of 7th April 2015 an economic evaluation of two example exploration resource prospects or leads, Klymene Prospect in the Kul-Bas Exploration and Production Contract, Kazakhstan; and Karatau Lead in the Bokhtar PSC, Tajikistan. Gustavson had previously completed an audit of these resource volumes, Klymene early in 2014 and Karatau in 2012, both in accordance with the reporting requirements of NI 51-101 adopted by Canadian securities regulatory authorities.

Klymene Prospect lies west of the current producing assets in Kazakhstan and is planned to be drilled this year with the KBD02 well (contingent on funding) to investigate 3 potential reservoirs, an Upper Aptian sand, the Lower Aptian (Doris style) sand, and the Upper Jurassic. Gustavson, in January 2014, ascribed an unrisked mean gross resource of 422mmbbls to this prospect. Given their latest audit of product prices and a development scenario Gustavson have now calculated a total risked EMV of US$347 million net to Tethys and an IRR of 71.6%.

Karatau Lead is an example of a large prospect or lead at both subsalt Jurassic and Cretaceous sand level in the area of the current Tajik 2D seismic acquisition programme and thus stands as a possible current analogue for a drillable prospect for 2016. In the previous 2012 Gustavson Resources audit this lead was estimated to have an unrisked gross mean resource potential of 6.2 TCF of gas plus associated condensate liquids. This lead has been calculated by Gustavson to have an EMV of US$368 million net to Tethys and an IRR of 49%.

Kazakhstan Operations Update

In Kazakhstan Q1 2015, gas production on average was the highest gas volume achieved in the last three years with quarterly targets being met.

Gas production levels averaged 530 Mcm/day (18.7 MMcf/day or 3,121 boe/day). The planned workover of the AKK14 well will commence shortly, followed by the AKK05 well, these have been delayed due to recent wellsite access issues related to the annual spring break-up but they are planned to be brought on stream in Q2 2015 and along with the planned optimisation of the compressors it is anticipated to further increase the production level above 570 Mcm/day.

Oil production during Q1 totalled 1,195 bopd. Production was affected in February and early March by a backlog in the oil distribution system due the drop in oil pricing regionally, and by the expected effects of the spring break up in the second half of March. Forecast oil production for April is 1,101 bopd and the Company expects production to go back above 2,000 bopd in May.

Other activity in the past quarter has seen the granting of an unprecedented four year extension to the Akkulka Exploration Contract within which the Doris and Dione oil fields are located. Tethys subsidiary, TethysAralGas (“TAG”) also received approval for the Akkulka shallow gas State reserves which will allow continuous production from the area and lead to an expansion of the Akkulka Production Contract. In addition, the final State commissioning of the new gas pipeline system and gas dehydration unit has been completed, both of which are functioning normally.

The Company is currently conducting tenders and/or finalising contracts for drill projects and 3D seismic in the Kyzyloi Production and Akkulka Exploration Contract areas respectively, as part of the ongoing shallow gas development programme, which will be implemented subject to funding.

Tajikistan

The Company and its Joint Venture partners in the Tajik Bokhtar PSC, Total and CNPC, have started to implement the recently agreed reduction of overhead and running costs aimed to reflect the lower oil price environment. Tethys believes there is still room for additional cuts going forward and intend to engage with partners to ensure cost-effective operations.

The seismic acquisition aimed at locating the first deep exploration well planned for this acreage has resumed after a winter stand-by period and parties are looking forward to receiving data on monthly basis. An innovative 3D passive seismic survey has also commenced. The associated magnetotellurics survey will also soon resume and associated geological studies are underway.

Georgia Work Program

The Company recently announced it signed an agreement with its partner, Georgian Oil and Gas (“GOG”), to remove its current funding obligations of approximately US$4 million under the farm-out agreement signed in July 2013, through reducing its interest in these projects. Under the terms of the new agreement Tethys has reduced its interest to 49% (from 56%) and Norio Operating Company (“NOC”) is now the Operator through GOG, on the licences on Blocks XIA, XIM and XIN. In tandem with this, the partners have renegotiated a more efficient new work programme with the State firstly for block XIN, with similar improved forward programmes for blocks planned for XIA and XIM, subject to ratification. Through negotiations with the Georgian State, the existing work obligations and deadlines on all blocks are being standardised to allow for more cost efficient and thorough exploration; with drill or drop decisions put back until adequate technical data has been gathered. The Gravity acquisition programme for XIN has now commenced.

Website: www.tethyspetroleum.com

About Tethys Petroleum:

Tethys Petroleum’s aim is to become the leading Independent E&P Company in Central Asia, by exercising capital discipline, by generating cash flow from existing discoveries and by maturing large exploration prospects within our highly-attractive frontier acreage.

The references in this press release to resources are to “Prospective Recoverable Resources” which means those quantities of petroleum estimated, to be potentially recoverable from undiscovered accumulations by application of future exploration and development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of these resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of these resources. The product types that may reasonably be expected from potential production consist of oil, condensate, natural gas and associated gas.

The resource estimates contained or referred to are estimates only and are not meant to provide a determination as to the volume or value of hydrocarbons attributable to Klymene Prospect and Karatau Lead. For both Klymene and Karatau the basis of the Expected Monetary Value (EMV) is the net Tethys working interest of the summated value of the Net Present Values 10% of all outcomes (including a failure case) multiplied by its Chance of Success, of that Prospect or Lead.

For Klymene Prospect the fiscal terms and oil pricing are as the NI 51-101 reserve report completed by Gustavson on Kazakhstan dated February 25th, 2015 and detailed in the AIF effective December 31, 2014.

For Karatau Lead fiscal terms are as per those published in the AIF and detailed in the Gustavson reserve report dated March 27, 2013. Product pricing was taken by Gustavson from 3rd party published information with an assumed discount for transport on the gas.

There are numerous uncertainties inherent in estimating quantities of resources and cash flows that may be derived, including many factors that are beyond the control of the Company. The following is a non-exhaustive list of factors which may have a significant impact on the above estimates of prospective resources: despite the classification that they are as yet undiscovered but may be potentially recoverable the Company may be unable to carry out the development or their potential recovery; the activity may not be economically viable; the Company may not have sufficient capital or time to develop them; there may be no market or transportation routes for the potential production; legal, contractual, environmental and governmental concerns might not allow for the recovery being undertaken; reservoir characteristics might prevent recovery. The recovery of the resources is subject to the following risks and uncertainties: market fluctuations, the proximity and capacity of oil and gas pipelines and processing equipment, government regulation, political issues, export issues, competing suppliers, operational issues (exploration, production, pricing, marketing and transportation), extensive controls and regulations imposed by various levels of government, lack of capital or income, the ability to drill productive wells at acceptable costs, the uncertainty of drilling operations, factors such as delays, accidents, adverse weather conditions, and the availability of drilling rigs and the delivery of equipment.

This press release contains “forward-looking information” which may include, but is not limited to, statements with respect to the completion of the SinoHan transaction, reduction of operating and capital expenditures, the positive financial effect of achievements being seen in our Q1 2015 results, the expectation that oil production will increase above 2,000 in May 2015, the commencement of gas sales to China via a new pipeline, the continued increase in gas volumes as well as plans for 2015, a strategic review and the mention of alternatives. Oil and gas prices are unstable and are subject to fluctuation. Any material decline in oil and/or natural gas prices could result in a reduction of the Company’s net production revenue and overall value and could result in ceiling test write downs. In Kazakhstan, the Company had fixed (Tenge) price gas contracts up to the end of 2014. Subsequent to the year-end, the gas supply contract was re-negotiated and Tenge prices fixed through to December 31, 2015, although there is provision to meet to discuss potential re-pricing in the event of a devaluation exceeding 10%. However there is speculation that the Tenge will devalue in the near future and the amount of devaluation is not know at this time. Such forward-looking statements reflect our current views with respect to future events, including the completion of the Sinohan transaction, the success of achieving strategic alternatives (there can be no assurances that management will be successful with these alternatives).

These circumstances indicate the existence of a material uncertainty related to events or conditions that may cast significant doubt about the Company’s ability to continue as a going concern and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The forward looking statements are based on the following assumptions; that the Company will be able to successfully reduce its operating and capital expenditures, that positive financial effects of recent achievements will be seen in our Q1 2015 results, that oil production will increase above 2,000 in May 2015, that gas sales will commence to China via a new pipeline, that gas volumes produced by the Company will continue to grow and that the SinoHan transaction will complete, and that if the SinoHan transaction does not complete that a strategic transaction will be achieved. These forward looking statements are subject to a number of risks and uncertainties, including the risk that the SinoHan transaction will not complete, negotiations over a new work programme with the Georgian State are unsuccessful, that positive financial effects of recent achievements will not be seen in our Q1 2015 results, that oil production will not increase above 2,000 in May 2015, that gas sales will not commence to China via a new pipeline, that gas production will not increase as anticipated, that the cost cutting program will be delayed or that it will not result in the reductions to our costs, and that the alternatives to the SinoHan transaction are not achieved. See our Annual Information Form for the year ended December 31, 2014 for a description of risks and uncertainties relevant to our business, including our exploration activities. The “forward looking statements” contained herein speak only as of the date of this press release and, unless required by applicable law, the Company undertakes no obligation to publicly update or revise such information, whether as a result of new information, future events or otherwise.

About Gustavson Associates:

Gustavson Associates is an oil, gas, and mining consulting firm with over 30 years of extensive international experience.

CONTACT INFORMATION

Tethys Petroleum Limited

[email protected]

Web: http://www.tethyspetroleum.com

CAMARCO (Financial PR)

Billy Clegg / Georgia Mann

+44(0)203 757 4983