2011-05-31

AKD03-Dione Exploration Well Tests Oil from Cretaceous

BOZOI, KAZAKHSTAN, May 31, 2011 (MARKETWIRE via COMTEX) --

Tethys Petroleum Limited ("Tethys" or the "Company") (TSX: TPL) today announced that the AKD03 (Dione) exploration well has tested oil from the Cretaceous interval, the uppermost pay zone in the well.

This interval, a sandstone of Middle Cretaceous (Albian) age at 1,630 metres (5,346 feet), tested 40 degrees API oil (slightly heavier than the oil in the Doris discovery) from a 6 metre (20 feet) normally pressured sand with a log porosity of some 22%. However the previous injection of drilling fluids and related chemicals to safely stabilise the well for drilling deeper has resulted insignificant formation damage which has resulted in minor flow to date on the initial test from the damaged formation. The Company is looking to source additional equipment that would involve by passing this formation damage and achieving production from the unaffected part of the reservoir. Currently such equipment is not available and as such operations have been suspended until the required equipment is sourced and delivered, this is likely to be in August 2011.

The AKD03 (Dione) exploration well was drilled on a separate prospect to the Doris discovery on the southern flank of the Akkulka high. The tectonics and geology are different in this area. The well, which reached a total depth of 3,975 metres (13,041 feet) in the Triassic, tested oil at a rate of some 400 bopd from Jurassic sands and now has also tested oil from the Cretaceous sandstones. An attractive potential oil zone was also encountered in the Triassic but mechanical difficulties prevented this zone from being tested. This zone may be the lateral equivalent of the similar zone encountered in the G6RE (Dodone) exploration well, which could also not be tested due to mechanical reasons.

Rosemary Johnson-Sabine, Vice President Exploration of Tethys, commented: "This well has achieved several of the objectives which were set prior to drilling. The fact that we have tested oil from two horizons in this well, with the potential for more, shows that an active oil migration system exists along the southern flank of the Akkulka high. The structures appear somewhat more complex in this area but with the assistance of the new 3D seismic data set (which was not available at the time when it was necessary to commence this well due to relinquishment obligations) we are gaining a greater understanding of the potential of the area and for future well locations."

Mark Sarssam, Vice President Reservoir Development of Tethys, added, "We are pleased that the AKD-03 exploration well has discovered oil and will incorporate testing results together with results from the ongoing multi-well drilling programme in order to optimise the appraisal and development of the area. We still have more work to do on the analysis of both the Jurassic and Cretaceous tests in this well and with the removal of formation damage and more effective development techniques we expect to obtain higher production rates on this well."

Elsewhere in Kazakhstan work is continuing on the appraisal of the Doris discovery and exploration on the large Kul-Bas prospect.

The AKD04 (Dero) well is currently being prepared for testing whilst awaiting final permits from the Kazak authorities. These are expected mid June 2011.

The AKD05 (Doris appraisal) well is drilling ahead and is expected to be at total depth shortly after which the well will be fully evaluated and tested.

Further evaluation of the recently acquired 3D seismic dataset using state of the art processing and interpretation, including inversion, spectral decomposition and AVO techniques is revealing the probable presence of sand fans in the Cretaceous sandstone sequence and these data are being integrated with the results of the well data to plan future appraisal well locations in the greater Doris area. Such stratigraphic traps could significantly increase the upside in Doris, in which pressure transient analysis of the AKD01 production suggests a connected volume (which may not all be oil) in excess of 90 million barrels.

The KBD01 (Kalypso) wildcat exploration well is currently being side-tracked in a direction where the Jurassic sands are interpreted to thicken, these units having had hydrocarbon shows within them whilst drilling the original hole through that sequence. Subsequently the well will be deviated back to the optimal location on the primary, deeper target, The Jurassic target was refined through information gathered during drilling the original hole and provides further potential in this prospect. This well is being drilled on a large structure some 50 km to the north west of the Doris discovery with its primary target being in the Carboniferous at approximately 4,000 metres and with secondary targets above this. Seismic shows this prospect to have in excess of 400 metres of potential vertical closure. It is expected that this well will reach total depth in August 2011.

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan, Tajikistan and Uzbekistan. 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. See our Annual Information Form for the year ended December 31, 2010 and other filings for a description of risks and uncertainties relevant to our business, including our exploration and production activities. Test production rates may vary from sustained production rates when developing a well or a deposit. The commerciality of any discovery can be affected by many factors including product prices, operating costs, capital costs, government take, sustained production levels and ultimate recovery of hydrocarbons. Hydrocarbon indications from drilling or wireline log data do not necessarily mean that mobile hydrocarbons are present in the formation or can be produced.

Contacts: Tethys Petroleum Limited Sabin Rossi Vice President Investor Relations +1 416 572 2065 +1 416 572 2201 (FAX) info@tethyspetroleum.com Tethys Petroleum Limited TD Canada Trust Tower 161 Bay Street, 27th Floor Toronto M5J 2S1, Canada www.tethyspetroleum.com Mobile site: http://m.tethyspetroleum.com In Asia-Pacific Quam IR Anita Wan, Associate Director + (852) 2217-2999 + (852) 2217-2999 (FAX) anita.wan@quamgroup.com
SOURCE: Tethys Petroleum Limited

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