GRAND CAYMAN, CAYMAN ISLANDS--(Marketwired - Sept. 2, 2016) - Tethys Petroleum Limited ("Tethys" or the "Company") (TSX:TPL) (LSE:TPL) today announces a corporate update.
Following approval of The Grand Court in the Cayman Islands on August 19, 2016 to reduce the par value of the Company's ordinary shares from US$0.10 to US$0.01 the Company has worked with Olisol and its advisors to complete the previously announced C$9.8 million private placement by September 2, 2016. The Company made the necessary filing with the Cayman Islands Registrar of Companies on August 31, 2016 at which time the reduction in par value became legally effective. The Investment Agreement requires a closing date two business days after all closing conditions have been satisfied or waived by the parties. The Company was prepared to complete the private placement with Olisol on September 2, 2016 as originally scheduled or to agree a short extension with Olisol if Olisol met certain funding commitments.
As Olisol has not done so the Company considers Olisol to be in breach of the Investment Agreement. The Company continues to work with Olisol to complete the private placement whilst at the same time evaluating alternative funding arrangements. Olisol continues to advance funds required under its' obligation of the terms of the Investment Agreement to the Company in order to meet working capital needs and has advanced a total of US$452,000 to the Company in recent days.
Kazakhstan legal proceedings
On August 24, 2016 the Court dismissed the claim brought against the Company and its subsidiaries in Kazakhstan and ordered the lifting of the seizure order over the Company's assets. The claimant lodged an appeal on August 29, 2016. Until the appeal is heard restrictions remain in place over the operation of the Company's bank accounts in Kazakhstan.
Tajikistan arbitration proceedings
As previously announced on August 15, 2016, Total and CNPC, the Company's partners in Tajikistan, filed for arbitration proceedings at the International Court of Arbitration in relation to the Company's cash call defaults and the partners' notice to the Company to withdraw. The partners are seeking to enforce the withdrawal notice and their claim for damages of US$9.0 million (and continuing) plus costs. The Company has submitted its response to the request for arbitration and has made a counter-claim against the partners of US$10.1 million.
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.
Some of the statements in this document are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of the Company or its officers with respect to Olisol's access to funds, the placing to Olisol, advances under the working capital facility, potential alternatives to the transactions with Olisol and related transactions. When used in this document, the words "expects," "believes," "anticipates," "plans," "may," "will," "should" and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements including risks and uncertainties with respect to completion of the placing, advances under the working capital facility and related transactions. In addition, certain regulatory approvals lapse as early as September 3, 2016, and there is no certainty that the Company will be able to obtain an extension. Should the Company be unable to obtain an extension, it may not be able to complete the placing even if Olisol proposes to do so. Moreover, there is a risk that the Company's counter-claim against Total and CNPC will not be successful and that the Company will be required to compensate Total and CNPC. There is also a risk that restrictions on the Company's bank accounts in Kazakhstan will be extended.
No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company or any other entity, and shareholders of the Company are cautioned not to place undue reliance on the forward-looking statements. Save as required by the Listing Rules and applicable law, the Company does not undertake to update or change any forward-looking statements to reflect events occurring after the date of this announcement.