2008-01-31

First Gas Revenue Received

Thursday, January 31, 2008 – Almaty, Kazakhstan – Tethys Petroleum Limited (“Tethys”) (TSX:TPL) today announced that it has received its first payment for commercial gas sales.

• Tethys recently completed a 35 mile (56 km) pipeline and associated compression plant, connecting Tethys’ Kyzyloi Gas Field to the Bukhara-Urals trunkline, one of Central Asia’s major export trunklines. 


• Gas production commenced from the Kyzyloi Gas Field on December 19, 2007. An initial two month run-in period was agreed with the gas buyer in order to optimise and adjust the compressors and the input pressures to the Bukhara-Urals. Average rates during this run-in period are planned to be approximately 17.6 MMcf/d (500 MCM/d). To date a maximum flow rate of some 26.7 MMcf/d (757 MCM/d) has been achieved into the Bukhara-Urals trunkline.


• Total revenue from December 19th to year-end 2007 which was received was approximately USD$225,000.


• Tethys is receiving USD$1.03/MCF for a base load of production from the Kyzyloi Field. Phase 2 production, which will be produced from the surrounding Akkulka Block, is expected in fourth quarter 2008, and will be sold on the local market at a price related to spot prices.


• Gas prices in the region continue to rise strongly. The current price of gas in the Bukhara-Urals trunkline that Tethys will sell into, which transports gas from Central Asia to Russia and onwards into Europe, has risen several times since Tethys concluded this original contract and has just risen a further 30% to USD$3.68/MCF in January 2008, with a further rise to USD$4.27/MCF agreed by the principal regional producers for July 2008.


• Russian Industry and Energy Minister Viktor Khristenko has recently been quoted as indicating that Russia will offer Central Asian gas exporting countries a price equal to the average cost of the fuel on the European markets, “In 2008 Russia must work out a pricing formula with Turkmenistan, Uzbekistan and Kazakhstan. We are also interested that the contracts be signed for a term of not less than 15 years. Everybody understands the situation on the gas market is changing significantly.”1

TPL 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 and statements with regard to future gas sales. Such forward looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including risks relating to future gas prices and the Company’s ability to sell its production at such prices, and including, the risks and uncertainties outlined under the section titles “Risk Factors and Uncertainties” in our prospectus (available at www.sedar.com). 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. Additional information in respect of the Kyzyloi shallow gas field and Akkulka area (also referred to as the Akkulka Block), including location, area, geologic age and lithology, depth, estimated costs and gas marketing information, appears in Tethys’ prospectus dated June 18, 2007.

1 FSU Oil and Gas Monitor January 30 2008

For more information please contact:

Sabin Rossi
Investor Relations Manager
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