2008-05-15

Q1 2008 Results

Thursday, May 15, 2008 – Guernsey, Channel Islands – Tethys Petroleum Limited (TSX:TPL) (“Tethys” or the “Company”) is pleased to announce its First Quarter 2008 Financial Results.

FINANCIAL HIGHLIGHTS

• In the first three months of 2008 the Company realized revenues (net of royalties) of US$1,431,000 from gas sales from the Kyzyloi Field. Gas production rose over the first two months of the year as the field facilities were run-in reaching an average rate of 20 million cubic feet per day in March from an initial six wells. 

• A net loss of US$4,701,000 recorded in the three months to March 31, 2008. More than US$3,000,000 of this loss was the result of noncash movements relating to costs of share options and warrants and the depreciation of proved properties.

• As of March 31, 2008 the Company had cash and cash equivalents of US$24,467,000 excluding pre-payments of US$4,912,000 principally related to pre-payments for drilling services for wells on the Kul-Bas Contract Area and initial payments for compressors and pipes for gas production from discoveries in the Akkulka Contract Area (Phase 2 of the gas development).

• In March 2008 the Company secured loan financing from a group of accredited investors in the amount of USD$5,300,000 toward the purchase of a new drilling rig from China.

Attached to this press release is summary of the Company’s financial results for the three-month period ended March 31, 2008. Consolidated Financial Statements with Managements Discussions and Analysis (MD&A) will be available on the company’s website www.tethyspetroleum.com and will also be available on the SEDAR website at www.sedar.com.

The Company also notes that in view of the recent major earthquake in western China, there are significant restrictions on the operation of railways and other transport routes in this area. The Company’s recently completed drilling rig was manufactured in Chengdu, China, close to scene of the earthquake, and although completed and undamaged, the rig, which is packed and ready for transport, is likely to be delayed in its journey to Kazakhstan by the results of this earthquake. This delay is dependent on the speed at which normal transportation activities can be restored but is anticipated to be at least one month and this would have a corresponding knock on effect on the commencement of drilling on the planned AD01 deep exploration well on the Akkulka Block. In addition the compressors for Phase 2 of the gas development project are also being manufactured in Chengdu (although at a different factory) and although we understand that the factory has experienced only minor damage, restoration of full production activities at the factory and possible delays in transportation of equipment to the factory necessary to complete the compressors may result in a delay in their manufacture although currently the Company believes any such delay is unlikely or only minor. The Company expresses its deep condolences to the people affected in the region and the hope that life can return to normal as soon as is possible.

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republic of Kazakhstan and more recently the Republic of Tajikistan. 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, including, the risks and uncertainties. See our Annual Information Form for the year ended December 31, 2007 and our other filings (available at www.sedar.com) for a description of risks and uncertainties relevant to our business, including our exploration activities. Should one or more of these risks materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected.

For more information please contact:
Sabin Rossi
Vice President Investor Relations
Tethys Petroleum Limited
TD Canada Trust Tower
161 Bay Street, 27th Floor
Toronto N5J 2S1
Canada

Office: 1-416-572-2065
Fax: 1-416-572-2201
Cell: 1-617-669-1841
e-mail: info@tethys.gg
website: www.tethyspetroleum.com

Ardak Akanov
Managing Director
PG Communications
Almaty, Samal 2 Business Center Satty
Office phone/fax:: 2 72 88 67, 2 72 82 37, 2 72 77 45
Cell: +77017115604
Email: development@pressclub.kz
website: www.pressclub.kz