2009-05-19

First Quarter 2009 Financial Results

ST. PETER PORT, GUERNSEY, May 19, 2009 (MARKETWIRE via COMTEX) -- Tethys Petroleum Limited ("Tethys" or the "Company" (TSX: TPL)) today announced its first quarter 2009 financial results. These are the first results reported by the Company in accordance with International Financial Reporting Standards ("IFRS"). The Company's previous financial results have been reported in accordance with United States Generally Accepted Accounting Principles ("US GAAP").

HIGHLIGHTS

- Revenue generated in the three months to March 31, 2009 was US$529,000 compared to US$1,431,000 in the same period of 2008 as a result of the Kyzyloi production being shut down in January and February 2009 due to the installation work on compressors.

- Capital expenditure of US$10,237,000 was incurred in the three months to March 31, 2009 compared to US$3,541,000 for the same period in 2008.

- A net loss of US$5,960,000 was recorded in the three months to March 31, 2009 compared to a loss of US$4,640,000 for the same period in 2008.

The Accounting Standards Board ("AcSB") confirmed in February 2008 that International Financial Reporting Standards ("IFRS") will be used for Canadian publicly accountable enterprises for financial periods beginning on and after January 1, 2011 but as a foreign issuer, Tethys took the decision to meet these standards early.

The financial statements for the three month period ended March 31, 2009 are the first to be prepared under IFRS and are available in full on www.sedar.com. The additional work involved in effecting and reconciling this switch resulted in the auditors' review not being complete at the time when the financial statements were filed. The review is anticipated to be completed within a matter of days.

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.

See our Annual Information Form for the year ended December 31, 2008 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 March 31, 2009 and December 31, 2008 --------------------------------------------------------------------------- (in thousands of US dollars) March 31, December 31, 2009 2008 $ $ Assets Non-current assets Intangible assets (note 10) 17,941 12,076 Property, plant and equipment (note 11) 74,227 69,839 Investments (note 12) 595 587 Other receivables (note 13) 4,532 6,357 ------------------------ 97,295 88,859 ------------------------ Current assets Inventories 329 213 Trade and other receivables (note 13) 2,999 2,664 Cash and cash equivalents (note 14) 7,966 22,200 ------------------------ 11,294 25,077 ------------------------ Total assets 108,589 113,936 ------------------------ ------------------------ Equity and Liabilities Equity attributable to shareholders Share capital (note 18) 6,779 6,639 Share premium (note 18) 139,299 138,598 Other reserves 25,764 25,060 Accumulated deficit (72,969) (67,009) ------------------------ 98,873 103,288 ------------------------ Liabilities Non-current liabilities Financial liabilities - borrowings (note 15) 5,680 6,072 Other non-current payables (note 16) 421 523 Provisions for other liabilities and charges (note 17) 374 465 ------------------------ 6,475 7,060 ------------------------ Current liabilities Financial liabilities - borrowings (note 15) 978 853 Trade and other payables (note 16) 2,263 2,735 ------------------------ 3,241 3,588 ------------------------ Total liabilities 9,716 10,648 ------------------------ Total shareholders' equity and liabilities 108,589 113,936 Commitments and contingencies (note 21) ------------------------ ------------------------ Tethys Petroleum Limited Interim Consolidated Statement of Comprehensive Loss (Unaudited) For the three months ended March 31 --------------------------------------------------------------------------- (in thousands of US dollars) 2009 2008 $ $ Sales and other operating revenues (note 5) 529 1,431 Production expenditure (285) (67) Depreciation, depletion and amortization (517) (1,105) Exploration and evaluation expenditure written off (17) - Administrative expenses (5,377) (4,025) --------------------- Operating loss (note 6) (5,667) (3,766) Finance income 30 167 Finance costs (323) (1,041) --------------------- Loss before tax (5,960) (4,640) Taxation (note 8) - - --------------------- Total comprehensive loss for the period attributable to shareholders (5,960) (4,640) --------------------- --------------------- Loss per share Basic and diluted (note 9) (0.09) (0.10) --------------------- --------------------- No dividends were paid or are proposed for the quarter (2008 - $Nil) All operations were continuing throughout both periods 2009 2008 $ $ Cash flow from operating activities Loss before income tax for the period (5,960) (4,640) Adjustments for Share-based payments to employees (note 7) 704 841 Net finance cost 293 874 Unsuccessful exploration and evaluation expenditures (note 10) 17 - Depreciation, depletion and amortization (note 11) 517 1,105 Net unrealised foreign exchange loss 1,154 17 --------------------- Operating cash flows before movements in working capital (3,275) (1,803) Increase in trade and other receivables (note 13) (570) (730) Decrease in trade and other payables (471) (265) Decrease in inventories (116) - --------------------- Cash used in operations (4,432) (2,798) Interest received 30 167 --------------------- Net cash used in operating activities (4,402) (2,631) --------------------- Cash flow from investing activities Expenditure on exploration and evaluation assets (note 10) (5,950) (134) Expenditures on other property, plant and equipment (note 11) (4,287) (3,407) Investment in restricted cash (8) (105) Advances to construction contractors 920 (1,285) Value added tax receivable (75) 59 --------------------- Net cash used in investing activities (9,400) (4,872) --------------------- Cash flow from financing activities Proceeds from short-term borrowings (note 15) - 5,300 Repayment of long-term borrowings (note 15) (212) - Interest paid on long-term borrowings and Historical Cost (162) - Other non-current liabilities (note 16) (22) (22) --------------------- Net cash used in financing activities (396) 5,278 --------------------- Effects of exchange on the balance of cash held in Foreign currency (36) - --------------------- Net decrease in cash and cash equivalents (14,234) (2,225) Cash and cash equivalents at beginning of the period 22,200 26,692 --------------------- Cash and cash equivalents at end of the period 7,966 24,467 --------------------- ---------------------

Contacts:
Tethys Petroleum Limited
Sabin Rossi
Vice President Investor Relations
416 572 2065
416 572 2201 (FAX)
info@tethyspetroleum.com
www.tethyspetroleum.com

In Kazakhstan
PG Communications
Ardak Akanov, Managing Director
+7 (727) 272 8867
development@pressclub.kz

SOURCE: Tethys Petroleum Limited

mailto:info@tethyspetroleum.com
http://www.tethyspetroleum.com
mailto:development@pressclub.kz