Tethys Petroleum Limited

Tethys Petroleum Limited

April 24, 2008 13:28 ET

Tethys Signs MOU for the Rostoshinskoe Field

ALMATY, KAZAKHSTAN--(Marketwire - April 24, 2008) - Tethys Petroleum Limited ("Tethys" or the "Company") (TSX:TPL) today announced that it's wholly owned subsidiary, Tethys Europa B.V. ("Tethys Europa") signed a Memorandum of Understanding (the "MOU") with Halyk Finance on behalf of Closed Mutual Investment Fund Halyk Perspectiva ("Halyk Perspectiva") concerning the Rostoshinskoe gas discovery in Kazakhstan.

The MOU outlines the willingness of Halyk Perspectiva to grant an option (the "Option") in favour of Tethys Europa for the acquisition of up to 50% of the interest (the "Option Interest") in the rights to explore and produce hydrocarbons from the Rostoshinskoe field (the "Rostoshinskoe Property") located in the Zelenovsky region of Western Kazakhstan, approximately 15 km from the City of Oral on the northern edge of the Pre-Caspian basin and to the west of the Karachaganak gas condensate field. The MOU gives Tethys Europa until July 1, 2008 to negotiate the terms of the Option.

The field was discovered in 1993 by well Rostoshinskoe #1 which tested gas from the Middle Carboniferous, Lower Permian and Upper Permian sequences. Chapman Petroleum Engineering Ltd. ("Chapman") has prepared a NI 51-101 compliant reserve report as at April 1, 2008, in respect of the Rostoshinskoe Property. This report indicates that there are Proven plus Probable reserves of approximately 553 Billion cubic feet of gas (net).

The MOU contemplates that Tethys Europa would commission McDaniel & Associates Consultants Ltd. ("McDaniel") to carry out a further assessment of and to prepare a report in respect of the reserves for the Rostoshinskoe Property. It is intended that the report will be finalised by June 15, 2008. Pursuant to the MOU, Halyk Perspectiva will provide all technical and economic data to McDaniel for use by McDaniel in their assessments of and report on the Rostoshinskoe Property. The terms of the agreement in respect of the Option will be finalised by the Company and Halyk Perspectiva upon reviewing this report.

Under the terms of the MOU, Tethys Europa has a right of first refusal to acquire up to a 50% interest in the event that Halyk Perspectiva wishes to transfer all or part of its participation interest excluding the Option Interest. Pursuant to the MOU, this right expires July 1, 2008 and the Company expects that it will determine, on or before this date, whether or not to enter into the Option Agreement.

Julian Hammond, Chief Commercial Officer of Tethys, commented: "We believe that the Rostoshinskoe field has significant potential and would be a good acquisition which fits with Tethys' focus on gas in Kazakhstan, particularly given that current prices for gas are increasing. This field is in a different region to our current gas production and exploration assets, but is located in an area of significant gas pipeline infrastructure close to the Russian border. We need the additional comfort of a reserve report from our current independent reserve auditors, McDaniel and Associates, and with this in hand we will hopefully be able to negotiate an acceptable deal to acquire an interest in this project."

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republic of Kazakhstan and more recently the Republic of Tajikistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

This press release contains "forward-looking information" which may include, but is not limited to, statements with respect to our operations. Such forward looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. The reserve information presented in this press release should be read in conjunction with the summary of the Chapman report to be made available by the company.

Tethys Petroleum Limited is registered in Guernsey, Channel Islands with registered number 41075 and is listed on the Toronto Stock Exchange (TSX) with the symbol "TPL"

Contact Information

  • Tethys Petroleum Limited
    Sabin Rossi
    Vice President Investor Relations
    (416) 572-2065 or Cell: (617) 669-1841
    (416) 572-2201 (FAX)
    Email: info@tethys.gg
    Website: www.tethyspetroleum.com
    In Kazakhstan
    PG Communications
    Ardak Akanov, Managing Director
    Office phone/fax: 2 72 88 67, 2 72 82 37, 2 72 77 45
    Cell: +77017115604
    Email: development@pressclub.kz