TBILISI, GEORGIA--(Marketwired - Jan. 2, 2014) - Tethys Petroleum Limited ("Tethys") (TSX:TPL)(LSE:TPL), the oil and gas exploration and production company focused on Central Asia and the Caspian Region, is pleased to announce that it has received the appropriate Georgian governmental consent for the acquisition of a 56% interest in Blocks XIA, XIM and XIN (Project "Iberia") in eastern Georgia. Tethys also announced that it will exit Uzbekistan.
The amendments to the Production Sharing Contracts ("PSCs") have been declared effective and will now be registered with the appropriate State bodies.
Tethys will not complete at this time the previously announced acquisition of Blocks VIII and XIG (Project "Tamar") as Tethys does not believe that all of the conditions relating to this acquisition will be fulfilled, and deciding instead to focus investment and resources at this time on the Iberia blocks where both conventional and unconventional resources are better defined at present. The 8,320,000 ordinary shares previously issued with respect to this project will be cancelled, resulting in the current shares outstanding being 299,557,744.
Tethys has made a corporate decision to exit Uzbekistan effective immediately due to recent changes in the business climate and political environment. It is expected to take up to three months to complete the process of exiting from the existing Production Enhancement Contract ("PEC") for the North Urtabulak field. This strategic decision will allow Tethys to refocus capital to other countries of operation, progressing both exploration and production activities.
Dr. David Robson, Executive Chairman and President of Tethys, said: "We are extremely pleased to have received final governmental consent for the acquisition of our interest in these world class assets with significant potential for conventional and non-conventional oil and gas production. This transaction significantly strengthens Tethys' diversified portfolio adding an unconventional oil play to our production and exploration assets in Kazakhstan, and our exciting new frontier exploration acreage in Tajikistan. We now have negotiated partnerships in all three countries of focus; local partners in Georgia, a Chinese private equity fund in Kazakhstan, and CNPC and Total in Tajikistan. Through these diverse partnerships we have spread our risk and brought in significant funding to the Company, whilst maintaining a material interest in each area. Exiting Uzbekistan will allow us to now focus more on these three valuable assets."
Notes to Editors:
An independent resource assessment (utilizing both seismic and well data) has been carried out on three Project Iberia blocks by Gustavson Associates in accordance with Canadian National Instrument 51-101 results in total Unrisked Mean Recoverable Prospective Resources in excess of 3.2 billion barrels oil equivalent. The key results (all figures Gross to the PSCs) are as follows:
- Unrisked Mean Prospective Oil in Place - 34.8 billion barrels
- Unrisked Mean Prospective Recoverable crude oil - 2.913 billion barrels
- 380 million barrels of conventional resources and
- 2,533 million barrels of unconventional resources
- Unrisked Mean Prospective Associated Gas - 1.815 trillion cubic feet (51.4 billion cubic metres)
- Total Unrisked Mean Prospective Recoverable Resources - 3.215 billion barrels oil equivalent
Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
The references in this press release to "Prospective Recoverable Resources" means those quantities of petroleum estimated, as of July 1, 2013, to be potentially recoverable from undiscovered accumulations by application of future 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.
These are Unrisked Prospective Resources as of July 1, 2013 that have not been risked for chance of discovery or chance of development. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development.
The resources 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 the Company's properties. 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 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, prospective resource estimates, the potential for successful discoveries and their commercialization, and our exploration targets. Such forward-looking statements reflect our current views with respect to future events and are subject to certain assumptions, the fact that the Company will be successful in confirming the existence of the accumulations of petroleum in respect of its exploration targets, and subject to certain risks and uncertainties, the risk that limited discoveries will result from exploration wells and as a result the risk that any or all of the prospective resources will not become recoverable. See our Annual Information Form for the year ended December 31, 2012 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.
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. The use of the word "Gross" means 100% of the PSC.