Tethys Petroleum Limited
TSX : TPL

Tethys Petroleum Limited

August 14, 2008 19:34 ET

Tethys Petroleum Limited: Second Quarter 2008 Financial Results

GUERNSEY, CHANNEL ISLANDS--(Marketwire - Aug. 14, 2008) - Tethys Petroleum Limited (TSX:TPL) ("Tethys" or the "Company") is pleased to announce its Second Quarter ("Q2") 2008 Financial Results.

FINANCIAL HIGHLIGHTS

- On June 27, 2008 the Company completed a public offering of ordinary shares raising gross proceeds of US$50 million (US$46.25 million after deduction of broker's commissions and professional fees).

- In Q2 2008 the Company realized revenues (net of royalties and not including VAT recovery) of US$1.56 million from gas sales from the Kyzyloi Field, with gas production for sales averaging approximately 20 million cubic feet per day (MMcf/d) from the initial six wells on the field.

- A net loss of US$ 5.28 million was recorded in the three months to June 30, 2008. More than US$3.6 million of this loss was the result of non-cash movements relating to costs of share options and warrants and the depreciation of proved properties. General and administration expenses were slightly lower than Q1 but were significantly higher than for the same period in 2007 primarily due to additional costs associated with the public offering and to increased staffing and business development costs related to further development of the Company's business.

- As of June 30, 2008 the Company had cash and cash equivalents of US$58.9 million excluding pre-payments of US$5.8 million, these pre-payments being principally related to pre-payments for drilling services for wells in Kazakhstan and stage payments for equipment required for Phase 2 of the Company's shallow gas development in Kazakhstan.

- In Q2 2008 capital expenditure of US$13.1 million was incurred, this being principally related to the purchase of the deep drilling rig "Telesto" and associated equipment, drilling of wells on the Akkulka and Kul Bas blocks, and on payments related to equipment for and construction of the Company's Phase 2 shallow gas development.

Attached to this press release is summary of the Company's financial results for the six-month period ended June 30, 2008. Consolidated Financial Statements with Management's 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.

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republic of Kazakhstan and the Republic of Tajikistan. This highly prolific oil and gas area is rapidly developing and Tethys believes 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. See our Annual Information Form for the year ended December 31, 2007 for a description of risks and uncertainties relevant to our business, including our exploration activities.

Tethys Petroleum Limited is registered in Georgetown, Grand Cayman, Cayman Islands and is listed on the Toronto Stock Exchange (TSX) with the symbol "TPL" and on the RFCA in Almaty, Kazakhstan.




Consolidated Balance Sheet (unaudited)

As at
-------------------------------
June 30, December 31,
Note 2008 2007
---------- ------------
(Expressed in 000's United
States dollars)
ASSETS

Current Assets
Cash and cash equivalents 58,903 26,692
Prepayments 3 675 351
Accounts Receivable 586 219
Value added tax recoverable 34 -
Other current assets 237 790
---------- ------------
Total current assets 60,435 28,052

Non Current Assets
Prepayments 3 5,129 3,062
Restricted Cash 4 443 318
Value added tax recoverable 5 2,755 2,752
Capital assets 6 47,195 37,472
---------- ------------
Total non-current assets 55,522 43,604

---------- ------------
Total Assets 115,957 71,656
---------- ------------
---------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable 7 991 1,388
Current portion of long term debt 8 804 -
Accrued & other liabilities 1,082 891
---------- ------------
Total current liabilities 2,877 2,279

Non Current Liabilities
Long term debt 8 4,310 -
Other non-current liabilities 9 572 776
Asset retirement obligation 10 729 661
---------- ------------
Total non current liabilities 5,611 1,437

---------- ------------
Total Liabilities 8,488 3,716
---------- ------------

Stockholders' equity
Share capital 145,733 99,483
Contributed Surplus 5,807 3,527
Warrants 17,535 16,555
Accumulated deficit (61,606) (51,625)
---------- ------------

Total stockholders' equity 107,469 67,940
---------- ------------

Total Liabilities and Stockholders'
Equity 115,957 71,656
---------- ------------
---------- ------------
Commitments and contingencies 11

The accompanying notes to these Financial Statements have been filed with
SEDAR.



Consolidated Statement of Operations and Comprehensive Loss ( unaudited )


For three months to Year to Date

June 30, June 30, June 30, June 30,
2008 2007 2008 2007
---------------------- --------------------
(Expressed in 000's (Expressed in 000's
United States United States
Note dollars except share dollars except share
data) data)
Revenues Net of
Royalties
Oil and gas sales 1,566 - 2,997 -
---------------------- --------------------
1,566 - 2,997 -
---------------------- --------------------

Expenses
Operating 196 - 263 -
Selling, general and
administrative 2,974 1,996 6,168 3,421
Stock based
compensation 13 1,709 16,339 2,280 16,339
Depreciation, depletion
and amortization 1,922 14 3,418 28
---------------------- --------------------
6,801 18,349 12,129 19,788
---------------------- --------------------
Operating Loss (5,235) (18,349) (9,132) (19,788)
---------------------- --------------------

Other (Expense):
Interest, net 124 (1,933) 291 (2,268)
Foreign exchange
(losses) (163) (9) (138) (143)
Finance charges 13 - - (980) (238)
Other (6) 174 (22) (2)
---------------------- --------------------
Total Other
Income/(Expense) (45) (1,768) (849) (2,651)
---------------------- --------------------

Loss Before Income
Taxes (5,280) (20,117) (9,981) (22,439)
Income taxes 12 - - - -
---------------------- --------------------
Net Loss and
Comprehensive
Loss for the period (5,280) (20,117) (9,981) (22,439)
---------------------- --------------------
---------------------- --------------------

Weighted average
number of common shares
outstanding 14 46,051,931 21,235,850 45,586,897 13,119,668

Basic and diluted loss
per share (0.11) (0.95) (0.22) (1.71)
---------------------- --------------------

The accompanying notes to these Financial Statements have been filed with
SEDAR.



Consolidated Statement of Cash Flows (unaudited)

For three months to Year to date
June 30, June 30, June 30, June 30,
Note 2008 2007 2008 2007
---------------------- --------------------
(Expressed in 000's (Expressed in 000's
United States United States
dollars) dollars)

Operating activities:
Net loss for the period (5,280) (20,117) (9,981) (22,439)
Items not affecting cash
Stock based compensation 1,709 16,339 2,280 16,339
Accretion 17 - 33 -
Finance costs - - 980 -
Non-cash interest expense - 1,816 - 2,108
Depreciation, depletion and
amortization 1,922 14 3,418 28

Net change in non-cash
working capital items
Accounts Receivable 547 (1,053) (367) (1,355)
Other current assets 121 - 519 -
Prepayments (110) 277 (324) 248
Accounts payable (279) 759 (397) 83
Accrued and other liabilities 337 1,496 191 1,655
---------------------- --------------------
Net cash used in operating
activities (1,016) (469) (3,648) (3,333)
---------------------- --------------------

Investing activities:
Capital expenditures (9,564) (5,249) (13,105) (7,534)
Restricted cash (20) (7) (125) (12)
Value added tax recoverable (63) - (4) -
Change in oil & gas suppliers
prepayments (782) (1,731) (2,067) (2,719)
---------------------- --------------------
Net cash used in investing
activities (10,429) (6,987) (15,301) (10,265)
---------------------- --------------------

Financing activities:
Proceeds from sale of common
stock 50,000 50,000 50,000 67,338
Share issue costs (3,750) (4,440) (3,750) (5,056)
Proceeds (Repayment) from
longterm debt (186) (5,010) 5,114 (5,000)
Other non-current liabilities (182) 32 (204) 32

---------------------- --------------------
Net cash provided by
financing activities 45,882 40,582 51,160 57,314
---------------------- --------------------

Net increase in cash and cash
equivalents 34,436 33,126 32,211 43,716
Cash and cash equivalents,
beginning of period 24,467 12,353 26,692 1,763
---------------------- --------------------
Cash and cash equivalents,
end of period 58,903 45,479 58,903 45,479
---------------------- --------------------
---------------------- --------------------

Interest paid 157 375 157 375

The accompanying notes to these Financial Statements have been filed with
SEDAR.


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@tethyspetroleum.com
    Website: www.tethyspetroleum.com
    or
    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