Tethys Announce Corporate Update
Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) (“Tethys” or the “Company”) has provided a corporate update to shareholders.
— 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.”
Full Release: Tethys-Corporate-Update
Source: Tethys Petroleum