2009-08-17

RETRANSMISSION: Second Quarter 2009 Financial Results

ST. PETER PORT, GUERNSEY, Aug 17, 2009 (MARKETWIRE via COMTEX) -- Tethys Petroleum Limited ("Tethys" or the "Company")(TSX: TPL) today announced its half year and second quarter 2009 financial results which are underscored by a 79% increase in revenues over the second quarter of last year and a five fold increase over the first quarter of this year.

The Company reports financial results in accordance with International Financial Reporting Standards ("IFRS").

HIGHLIGHTS

  • Production revenues for the quarter from Kazakhstan and Uzbekistan totalled some US$2.8 million compared to US$1.6 million for the same period in 2008 and $0.5 million for Q1 2009. The newly acquired North Urtabulak oil project in Uzbekistan contributed approximately US$1.6 million of the Q2 2009 revenues. Oil production from the North Urtabulak field attributable to Tethys in Q2 2009 averaged 914 barrels of oil per day ("bopd") compared to current net production which is some 1,000 bopd.

  • Gas production from the Kyzyloi Field in Kazakhstan increased by 236% in Q2 2009 compared to Q1 2009 with the work on the upgrading of the Kyzyloi production system being completed (to take Phase 2 Akkulka Field gas). However, because of restrictions further up in the Bukhara-Urals gas trunkline Kyzyloi gas output was reduced to approximately half of its planned production level with effect from the middle of May averaging some 400 thousand cubic metres a day (Mcm/d) (14.1 million cubic feet a day (MMcf/d)) for the quarter. As a result of this reduction in the Kyzyloi output the level of revenue generated in Kazakhstan in Q2 2009 was less than anticipated at approximately US$1.2 million. This restriction has now been removed and gas production is currently some 520 Mcm/d (18.4 MMcf/d) to be progressively increased to 566 Mcm/d (20MMcf/d).

  • A net loss of approximately US$5.6 million was recorded in Q2, 2009 compared to a net loss of approximately US$5.0 million for the same period in 2008.

  • Capital expenditure of approximately US$4.8 million was incurred in Q2, 2009 compared to US$9.6 million for the same period in 2008.

The unaudited Interim Consolidated Financial Statements for June 30, 2009 and Management Discussion and Analysis are available in full on www.sedar.com.

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, 2008 and other filings for a description of risks and uncertainties relevant to our business, including our exploration and development activities.

Tethys Petroleum Limited Interim Consolidated Statement of Financial Position (Unaudited) As at June 30, 2009 and December 31, 2008 ---------------------------------------------------------------------------- (in thousands of US dollars) June 30, December 31, January 1, 2009 2008 2008 $ $ (see note 23) $ Assets Non-current assets Intangible assets 23,837 11,688 7,335 Property, plant and equipment 75,043 69,839 38,327 Investments 606 587 318 Other receivables 4,284 6,357 5,814 ----------------------------------------- 103,770 88,471 51,794 ----------------------------------------- Current assets Inventories 458 213 - Trade and other receivables 2,800 2,664 1,360 Cash and cash equivalents 20,549 22,200 26,692 ----------------------------------------- 23,807 25,077 28,052 ----------------------------------------- Total assets 127,577 113,548 79,846 ----------------------------------------- ----------------------------------------- Equity and Liabilities Equity attributable to shareholders Share capital 13,455 6,639 4,511 Share premium 153,863 138,598 94,972 Other reserves 26,767 25,147 20,728 Accumulated deficit (78,263) (66,654) (44,470) ----------------------------------------- 115,822 103,730 75,741 Liabilities Non-current liabilities Financial liabilities - borrowings 4,638 5,096 - Other non-current payables 461 523 776 Provisions for other liabilities and charges 200 465 1,050 ----------------------------------------- 5,299 6,084 1,826 ----------------------------------------- Current liabilities Financial liabilities - borrowings 1,149 853 - Financial liabilities - warrants 629 146 - Trade and other payables 4,678 2,735 2,279 ----------------------------------------- 6,456 3,734 2,279 ----------------------------------------- Total liabilities 11,755 9,818 4,105 ----------------------------------------- Total shareholders' equity and liabilities 127,577 113,548 79,846 Commitments and contingencies ----------------------------------------- ----------------------------------------- Tethys Petroleum Limited Interim Consolidated Statement of Comprehensive Loss (Unaudited) For the three and six months ended June 30 ---------------------------------------------------------------------------- (in thousands of US dollars, except for per share amounts) Three months ended Six months ended June 30, June 30, June 30, June 30, 2009 2008 2009 2008 $ $ $ $ Sales and other operating revenues 2,797 1,566 3,326 2,997 Production expenditures (956) (196) (1,241) (263) Depreciation, depletion and amortization (1,398) (1,249) (1,915) (2,354) Share based payments - Foreign exchange loss - Exploration and evaluation expenditure written off (109) (274) (126) (274) Fair value gains (loss) on derivative financial instrument (101) 112 (61) 141 Administrative expenses (5,099) (5,228) (10,572) (9,253) ----------------------------------------- Operating loss (4,866) (5,269) (10,589) (9,006) Finance income 19 257 49 424 Finance costs (746) (11) (1,069) (1,052) ----------------------------------------- Loss before tax (5,593) (5,023) (11,609) (9,634) Taxation - - - - ----------------------------------------- Total comprehensive loss for the period attributable to shareholders (5,593) (5,023) (11,609) (9,634) ----------------------------------------- ----------------------------------------- Loss per share Basic and diluted (0.06) (0.10) (0.15) (0.21) ----------------------------------------- ----------------------------------------- No dividends were paid or are declared for the period (2008 - $Nil) All operations were continuing throughout the period Three months ended Six months ended June 30, June 30, June 30, June 30, 2009 2008 2009 2008 $ $ $ $ Cash flow from operating activities Loss before income tax for the period (5,593) (5,023) (11,609) (9,634) Adjustments for Share-based payments to employees 916 2,084 1,620 2,925 Net finance cost/(income) 727 (246) 1,020 628 Unsuccessful exploration and evaluation expenditures 109 274 126 274 Depreciation, depletion and amortization 1,398 1,249 1,915 2,354 Fair value gain/(loss) on derivative financial instrument 101 (112) 61 (141) Net unrealised foreign exchange loss (83) 18 1,167 34 ----------------------------------------- Operating cash flows before movements in working capital (2,425) (1,756) (5,700) (3,560) Increase in trade and other receivables 732 558 162 (172) Decrease in trade and other payables 725 58 254 (207) Increase in inventories (129) - (245) - ----------------------------------------- Cash used in operations (1,097) (1,140) (5,529) (3,939) Interest received 19 124 49 291 ----------------------------------------- Net cash used in operating activities (1,078) (1,016) (5,480) (3,648) ----------------------------------------- Cash flow from investing activities Expenditure on exploration and evaluation assets (3,056) (1,563) (9,006) (1,697) Expenditures on property, plant and equipment (1,722) (8,002) (6,009) (11,408) Acquisition of subsidiary net of cash received 532 532 Investment in restricted cash (11) (21) (19) (126) Advances to construction contractors 234 (782) 1,154 (2,066) Value added tax receivable 31 (62) (44) (4) ----------------------------------------- Net cash used in investing activities (3,992) (10,430) (13,392) (15,301) ----------------------------------------- Cash flow from financing activities Proceeds from short-term borrowings 2,500 - 2,500 5,300 Repayment of short-term borrowings (2,500) - (2,500) - Repayment of long-term borrowings (152) (186) (364) (186) Interest paid on long-term borrowings and other non-current payables (230) - (392) - Other non-current liabilities (20) (182) (42) (204) Proceeds from issuance of ordinary shares 20,000 50,000 20,000 50,000 Costs of issuance of ordinary shares (1,981) (3,750) (1,981) (3,750) ----------------------------------------- Net cash used in financing activities 17,617 45,882 17,221 51,160 ----------------------------------------- Effects of exchange on the balance of cash held in foreign currency 36 - - - ----------------------------------------- Net decrease in cash and cash equivalents 12,583 34,436 (1,651) (32,211) Cash and cash equivalents at beginning of the period 7,966 24,467 22,200 26,692 ----------------------------------------- Cash and cash equivalents at end of the period 20,549 58,903 20,549 58,903 ----------------------------------------- -----------------------------------------

Contacts: Tethys Petroleum Limited Sabin Rossi Vice President Investor Relations +1 416 572 2065 +1 416 572 2201 (FAX) info@tethyspetroleum.com www.tethyspetroleum.com In Kazakhstan PG Communications Ardak Akanov Managing Director Office phone/fax: +7 (727) 272 8867 development@pressclub.kz
SOURCE: Tethys Petroleum Limited

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