GRAND CAYMAN, CAYMAN ISLANDS–(Marketwired – May 13, 2016) – Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) today announced its Results for the quarter ended March 31, 2016.
Q1 Financial Highlights (all figures reported in USD unless stated otherwise. 2015 amounts are for the quarter ended March 31, 2015)
Oil and gas revenue of USD3.5m (2015: USD6.0m);
Production expenses down 54% to USD1.2m (2015: USD2.6m);
G&A expenses down 37% to USD1.8m (2015: USD2.8m);
Loss of USD5.7m (2015:USD2.1m) due to higher depreciation, depletion and amortization of USD2.2m and higher financing costs of USD1.3m;
Capital expenditure was lower due to lack of funding to develop the Company’s assets with expenditure in the prior period relating to new gas well tie-ins and Tajikistan exploration;
Net debt increased as a result of interim finance obtained as part of larger strategic transactions which did not complete.
Q1 Operational Highlights
Oil

Current quarter oil production averaged 861 bopd compared with 1,195 bopd in Q1 2015, reflecting a natural decline in overall production as well as prolonged winter and spring oil trucking disruption;
Oil production cost per barrel in the current quarter reduced to USD8.37 compared with USD13.91 in Q1 2015 despite lower production volume as a result of reductions in staff levels and other operating cost reduction initiatives as well as the devaluation of the Kazakhstan currency, the Tenge;
Oil prices averaged USD7.47 per bbl in the quarter compared with USD13.00 per bbl in Q1 2015, a reduction of 43%, reflecting the fall in World oil price and the devaluation of the Tenge.
Gas
Current quarter gross gas production averaged 2,442 boe/d compared with 3,173 bopd in Q1 2015, reflecting a natural decline in overall production;
Gas production cost per Mcm in the current quarter reduced to USD13.27 compared with USD21.47 in Q1 2015 despite lower production volume as a result of reductions in staff levels and other operating cost reduction initiatives as well as the Tenge devaluation;
An increase in gas price in local currency of over 50 percent was obtained from January 1, 2016, however, this was negatively affected in USD terms due to the Tenge devaluation.
Q1 Corporate Highlights
March 2, 2016 Facility Agreement Amendment signed with Olisol;
Olisol Petroleum Limited agreed to convert US$6.3 million of its outstanding debt into 63,044,460 shares in Tethys at a price of US$0.10. The 5-day volume weighted average price of shares in Tethys was CDN$0.04 (US$0.03).
NI 51-101 report issued by Gustavson Associates with an effective date of December 31, 2015 (as set out in the Annual Information Form dated March 29, 2016 available at sedar.com):
23.97 million barrels of oil equivalent gross (i.e. before the application of Kazakh Mineral Extraction Tax) Proven plus Probable Reserves
NPV10 USD183.6 million (for gross Proven plus Probable Reserves)
Post Q1 Highlights
On April 29, 2016 Tethys announced that it has entered into a binding investment agreement with Olisol Investments Limited (“Olisol”) setting out the terms and conditions upon which Olisol Petroleum Limited, a wholly-owned subsidiary of Olisol (“OPL”), has agreed to purchase 181,240,793 new ordinary shares in Tethys at a price of C$0.054 per Share, for total proceeds of C$9.8 million, by way of a private placement and to commit to backstop a further equity fundraising of 50 million Shares at C$0.054 per Share (collectively, the “Olisol transaction”), subject to the terms and conditions of the investment agreement, including shareholder, court and regulatory approvals. This will generate proceeds of a total of C$12.5 million upon closing the transactions. An annual and special shareholders’ meeting (the “AGM”) has been called for May 31, 2016 for shareholders to approve a number of resolutions related to the Olisol transaction and the annual election of directors and appointment of auditors.
The Notice of Meeting and Management Information Circular for the AGM (the “meeting materials”) together with forms of proxy, voting instructions and directions (as applicable) have been mailed to shareholders and are available on sedar.com. Shareholders are encouraged to carefully review the meeting materials and vote in favour of the resolutions set out in the meeting materials, including those related to the Olisol transaction. The Olisol transaction was unanimously supported by the Tethys Board of Directors.
Voting instructions for registered and non-registered shareholders are set out in the meeting materials.
Shareholder questions or requests for assistance with voting at the AGM should be directed to [email protected].
The full Q1 Results together with Management’s Discussion and Analysis have been filed with the Canadian securities regulatory authorities. Copies of the filed documents may be obtained via SEDAR at www.sedar.com or on the Tethys website at www.tethyspetroleum.com. The summary financial statements are attached to this press release.
The Company’s Q1 2016 financial statements are prepared under International Financial Reporting Standards (IFRS).
A barrel of oil equivalent (“boe”) conversion ratio of 6,000 cubic feet (169.9 cubic metres) of natural gas = 1 barrel of oil has been used and is based on the standard energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Cautionary Statements
This press release contains “forward-looking information” which may include, but is not limited to, statements with respect to our operations and completion of the Olisol transaction. Such forward-looking statements reflect our current views with respect to future events and assume the completion of the Olisol transaction. These forward-looking statements are subject to certain risks and uncertainties, including the risk that the Olisol transaction will not receive required shareholder, court and regulatory approvals, that closing conditions will not be satisfied or that one or more aspects of the Olisol transaction will be otherwise delayed and accordingly that the Olisol transaction will not be completed. See our Annual Information Form for the year ended December 31, 2015 for a description of risks and uncertainties relevant to our business, including our exploration activities.
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.

CONTACT INFORMATION
Tethys Petroleum
[email protected]
www.tethyspetroleum.com