GRAND CAYMAN, CAYMAN ISLANDS--(Marketwired - Nov. 1, 2016) - Tethys Petroleum Limited ("Tethys" or the "Company") (TSX:TPL)(LSE:TPL) today announces that it acknowledges the press release by Olisol Petroleum Limited ("Olisol") on October 28, 2016 relating to Tethys subsidiary, Tethys Aral Gas LLP's ("TAG") gas sales contract with Intergas Central Asia ("ICA"), the Kazakh State-owned gas transport company ("Gas Contract"). Olisol's unauthorized release of confidential information contained factual inaccuracies and Tethys wishes to clarify certain matters.
Prior to Olisol's press release, Tethys had filed a confidential material change report (the "Report") with the relevant Canadian securities regulator as it is permitted to do under applicable Canadian securities laws. Tethys filed such Report confidentially as the Company contests the grounds for the cancellation of the receipt of gas by ICA and its right to terminate the Gas Contract, is in discussions with ICA and Kazakh Government officials regarding such matters, and is hopeful that such matters will be resolved amicably and to the satisfaction of all parties in the very near future. As such, the Company believed that disclosure of the cancellation of receipt of gas and the termination of the Gas Contract would be unduly detrimental to the interests of Tethys, and potentially be misleading or confusing to investors, in the event that the Company is successful in having the Gas Contract reinstated.
Contrary to Olisol's assertion that the cancellation of the Gas Contract is irrevocable, the Company continues to be in discussions with ICA and Governmental officials, and believes that there remains a reasonable prospect that ICA will reinstate the Gas Contract. Further, the Company does not believe that the loss of the gas sales to date have been material to the Company.
The relevant facts regarding the Gas Contract are as follows:
On October 13, 2016, representatives of TAG received a letter from ICA indicating that it would be cancelling acceptance of gas from TAG under the Gas Contract. Following receipt of the letter, representatives of TAG engaged in discussions with ICA regarding the letter and payment for amounts due under the Gas Contract.
On October 17, 2016, TAG received a letter from ICA stating that ICA was cancelling its acceptance of gas from TAG effective as of 1pm (Kazakh time) on October 18, 2016. On October 18, 2016, TAG sent a response letter to ICA questioning the basis for cancellation of the gas. On October 19, 2016, representatives of TAG met with Governmental officials as well as members of ICA to try to resolve matters.
On October 21, 2016, TAG received a further letter from ICA indicating that in addition to cancelling acceptance of gas from TAG, it was terminating the Gas Contract. In this letter, ICA acknowledged outstanding amounts for unpaid gas of US$3 million though did not set a timeline for payment of such amounts.
The Company continues to contest the grounds for cancellation of the receipt of gas by ICA and its right to terminate the Gas Contract and is in discussions with ICA and Government officials regarding such matters and is hopeful that they will be resolved amicably and to the satisfaction of all parties in the very near future.
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 the potential that exists in both exploration and in discovered deposits in Central Asia and the Caspian Region and resolution of the Gas Contract matters. 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 the potential that exists in both exploration and in discovered deposits in Central Asia and resolution of the Gas Contract matters.
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.