Tethys Petroleum Limited

Tethys Petroleum Limited

May 15, 2008 23:34 ET

Tethys Petroleum Limited Q1 2008 Results

GUERNSEY, CHANNEL ISLANDS--(Marketwire - May 15, 2008) - Tethys Petroleum Limited (TSX:TPL) ("Tethys" or the "Company") is pleased to announce its First Quarter 2008 Financial Results.


- In the first three months of 2008 the Company realized revenues (net of royalties) of US$1,431,000 from gas sales from the Kyzyloi Field. Gas production rose over the first two months of the year as the field facilities were run-in reaching an average rate of 20 million cubic feet per day in March from an initial six wells.

- A net loss of US$4,701,000 recorded in the three months to March 31, 2008. More than US$3,000,000 of this loss was the result of noncash movements relating to costs of share options and warrants and the depreciation of proved properties.

- As of March 31, 2008 the Company had cash and cash equivalents of US$24,467,000 excluding pre-payments of US$4,912,000 principally related to pre-payments for drilling services for wells on the Kul-Bas Contract Area and initial payments for compressors and pipes for gas production from discoveries in the Akkulka Contract Area (Phase 2 of the gas development).

- In March 2008 the Company secured loan financing from a group of accredited investors in the amount of USD$5,300,000 toward the purchase of a new drilling rig from China.

Attached to this press release is summary of the Company's financial results for the three-month period ended March 31, 2008. Consolidated Financial Statements with Managements Discussions and Analysis (MD&A) will be available on the company's website www.tethyspetroleum.com and will also be available on the SEDAR website at www.sedar.com.

The Company also notes that in view of the recent major earthquake in western China, there are significant restrictions on the operation of railways and other transport routes in this area. The Company's recently completed drilling rig was manufactured in Chengdu, China, close to scene of the earthquake, and although completed and undamaged, the rig, which is packed and ready for transport, is likely to be delayed in its journey to Kazakhstan by the results of this earthquake. This delay is dependent on the speed at which normal transportation activities can be restored but is anticipated to be at least one month and this would have a corresponding knock on effect on the commencement of drilling on the planned AD01 deep exploration well on the Akkulka Block. In addition the compressors for Phase 2 of the gas development project are also being manufactured in Chengdu (although at a different factory) and although we understand that the factory has experienced only minor damage, restoration of full production activities at the factory and possible delays in transportation of equipment to the factory necessary to complete the compressors may result in a delay in their manufacture although currently the Company believes any such delay is unlikely or only minor. The Company expresses its deep condolences to the people affected in the region and the hope that life can return to normal as soon as is possible.

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, including, the risks and uncertainties. See our Annual Information Form for the year ended December 31, 2007 and our other filings (available at www.sedar.com) for a description of risks and uncertainties relevant to our business, including our exploration activities. Should one or more of these risks materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected.

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".

(formerly known as Tethys Petroleum Investments Limited)

Consolidated Balance Sheets (unaudited)

As at
March 31, December 31,
Note 2008 2007
(Expressed in 00's United States dollars)


Current Assets
Cash and cash equivalents 24,467 26,692
Prepayments 3 565 351
Accounts Receivable 1,133 219
Value added tax recoverable 71 -
Other current assets 321 790
Total current assets 26,557 28,052

Non Current Assets
Prepayments 3 4,347 3,062
Restricted Cash 4 423 318
Value added tax recoverable 5 2,693 2,752
Capital assets 6 39,526 37,472


Total Assets 73,546 71,656


Current Liabilities
Accounts payable 7 1,270 1,388
Current portion of long
term debt 8 780 -
Accrued & other liabilities 745 891
Total current liabilities 2,795 2,279

Non Current Liabilities
Long term debt 8 4,520 -
Other non current liabilities 9 754 776
Asset retirement obligation 10 686 661
5,960 1,437


Total Liabilities 8,755 3,716

Stockholders' equity
Common stock, authorized -
shares issued, issuable and
outstanding -
45,116,696 at March 31, 2008
and at December 31, 2007 13 99,483 99,483
Contributed Surplus 3,527 3,527
Warrants 18,107 16,555
Accumulated deficit (56,326) (51,625)

Total stockholders' equity 64,791 67,940

Total Liabilities and
Stockholders' Equity 73,546 71,656

Commitments and contingencies 11

See accompanying notes to these financial statements

Approved by Board of Directors

------------ ------------
Director Director

(formerly known as Tethys Petroleum Investments Limited)

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

For the three months to 31 March,

2008 2007
(Expressed in 000's United States
Note dollars except share data)

Revenue Net of Royalties
Oil and gas sales 1,431 -
1,431 -

Operating 67 -
Selling, general
and administrative 3,765 1,663
Depreciation, depletion
and amortization 1,496 14
5,328 1,677
(3,897) (1,677)

Operating Loss

Other Income (Expense):
Interest, net 167 (335)
Foreign exchange gains (losses) 25 (134)
Finance charges (980) -
Other (16) (175)
Total Other Income/(Expense) (804) (644)

Loss Before Income Taxes (4,701) (2,321)
Income Taxes 12 - -
Net Loss and Comprehensive
Loss for the period (4,701) (2,321)

Weighted average number of
common shares outstanding 15 45,116,696 17,006,540

Basic and diluted loss (US$)
per share (0.10) (0.14)

See accompanying notes to these financial statements

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