/EINPresswire.com/ -- GRAND CAYMAN, CAYMAN ISLANDS -- (Marketwired) -- 05/13/16 -- Tethys Petroleum Limited (TSX: TPL)(LSE: TPL) today announced its Results for the quarter ended March 31, 2016.

Q1 Financial Highlights (all figures reported in USD unless stated otherwise. 2015 amounts are for the quarter ended March 31, 2015)

--  Oil and gas revenue of USD3.5m (2015: USD6.0m);
--  Production expenses down 54% to USD1.2m (2015: USD2.6m);
--  G&A expenses down 37% to USD1.8m (2015: USD2.8m);
--  Loss of USD5.7m (2015:USD2.1m) due to higher depreciation, depletion and
    amortization of USD2.2m and higher financing costs of USD1.3m;
--  Capital expenditure was lower due to lack of funding to develop the
    Company's assets with expenditure in the prior period relating to new
    gas well tie-ins and Tajikistan exploration;
--  Net debt increased as a result of interim finance obtained as part of
    larger strategic transactions which did not complete.

Q1 Operational Highlights

Oil

--  Current quarter oil production averaged 861 bopd compared with 1,195
    bopd in Q1 2015, reflecting a natural decline in overall production as
    well as prolonged winter and spring oil trucking disruption;
--  Oil production cost per barrel in the current quarter reduced to USD8.37
    compared with USD13.91 in Q1 2015 despite lower production volume as a
    result of reductions in staff levels and other operating cost reduction
    initiatives as well as the devaluation of the Kazakhstan currency, the
    Tenge;
--  Oil prices averaged USD7.47 per bbl in the quarter compared with
    USD13.00 per bbl in Q1 2015, a reduction of 43%, reflecting the fall in
    World oil price and the devaluation of the Tenge.

Gas

--  Current quarter gross gas production averaged 2,442 boe/d compared with
    3,173 bopd in Q1 2015, reflecting a natural decline in overall
    production;
--  Gas production cost per Mcm in the current quarter reduced to USD13.27
    compared with USD21.47 in Q1 2015 despite lower production volume as a
    result of reductions in staff levels and other operating cost reduction
    initiatives as well as the Tenge devaluation;
--  An increase in gas price in local currency of over 50 percent was
    obtained from January 1, 2016, however, this was negatively affected in
    USD terms due to the Tenge devaluation.

Q1 Corporate Highlights

--  March 2, 2016 Facility Agreement Amendment signed with Olisol;
--  Olisol Petroleum Limited agreed to convert US$6.3 million of its
    outstanding debt into 63,044,460 shares in Tethys at a price of US$0.10.
    The 5-day volume weighted average price of shares in Tethys was CDN$0.04
    (US$0.03).
--  NI 51-101 report issued by Gustavson Associates with an effective date
    of December 31, 2015 (as set out in the Annual Information Form dated
    March 29, 2016 available at sedar.com):
    --  23.97 million barrels of oil equivalent gross (i.e. before the
        application of Kazakh Mineral Extraction Tax) Proven plus Probable
        Reserves
    --  NPV10 USD183.6 million (for gross Proven plus Probable Reserves)

Post Q1 Highlights

On April 29, 2016 Tethys announced that it has entered into a binding investment agreement with Olisol Investments Limited ("Olisol") setting out the terms and conditions upon which Olisol Petroleum Limited, a wholly-owned subsidiary of Olisol ("OPL"), has agreed to purchase 181,240,793 new ordinary shares in Tethys at a price of C$0.054 per Share, for total proceeds of C$9.8 million, by way of a private placement and to commit to backstop a further equity fundraising of 50 million Shares at C$0.054 per Share (collectively, the "Olisol transaction"), subject to the terms and conditions of the investment agreement, including shareholder, court and regulatory approvals. This will generate proceeds of a total of C$12.5 million upon closing the transactions. An annual and special shareholders' meeting (the "AGM") has been called for May 31, 2016 for shareholders to approve a number of resolutions related to the Olisol transaction and the annual election of directors and appointment of auditors.

The Notice of Meeting and Management Information Circular for the AGM (the "meeting materials") together with forms of proxy, voting instructions and directions (as applicable) have been mailed to shareholders and are available on sedar.com. Shareholders are encouraged to carefully review the meeting materials and vote in favour of the resolutions set out in the meeting materials, including those related to the Olisol transaction. The Olisol transaction was unanimously supported by the Tethys Board of Directors.

Voting instructions for registered and non-registered shareholders are set out in the meeting materials.

Shareholder questions or requests for assistance with voting at the AGM should be directed to info@tethyspetroleum.com.

The full Q1 Results together with Management's Discussion and Analysis have been filed with the Canadian securities regulatory authorities. Copies of the filed documents may be obtained via SEDAR at www.sedar.com or on the Tethys website at www.tethyspetroleum.com. The summary financial statements are attached to this press release.

The Company's Q1 2016 financial statements are prepared under International Financial Reporting Standards (IFRS).

A barrel of oil equivalent ("boe") conversion ratio of 6,000 cubic feet (169.9 cubic metres) of natural gas = 1 barrel of oil has been used and is based on the standard energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Cautionary Statements

This press release contains "forward-looking information" which may include, but is not limited to, statements with respect to our operations and completion of the Olisol transaction. Such forward-looking statements reflect our current views with respect to future events and assume the completion of the Olisol transaction. These forward-looking statements are subject to certain risks and uncertainties, including the risk that the Olisol transaction will not receive required shareholder, court and regulatory approvals, that closing conditions will not be satisfied or that one or more aspects of the Olisol transaction will be otherwise delayed and accordingly that the Olisol transaction will not be completed. See our Annual Information Form for the year ended December 31, 2015 for a description of risks and uncertainties relevant to our business, including our exploration activities.

About Tethys Petroleum

Tethys Petroleum's aim is to become the leading independent E&P Company in Central Asia, by exercising capital discipline, by generating cash flow from existing discoveries and by maturing large exploration prospects within our highly attractive frontier acreage.

Tethys Petroleum Limited
Consolidated Statement of Financial Position
(in thousands of US dollars)
                                                      As at
                                          March 31, 2016   December 31, 2015
----------------------------------------------------------------------------

Non-current assets
Intangible assets                                 65,499              64,202
Property, plant and equipment                    110,672             113,397
Restricted cash                                    2,232               2,233
Investment in joint arrangements                       4                   4
Trade and other receivables                        2,195               2,457
Deferred tax                                         223                 226
----------------------------------------------------------------------------
                                                 180,825             182,519

Current assets
Cash and cash equivalents                          1,133               3,272
Trade and other receivables                        6,208               3,710
Inventories                                          872                 879
Restricted cash                                       65                 215
----------------------------------------------------------------------------
                                                   8,278               8,076

----------------------------------------------------------------------------
Total assets                                     189,103             190,595
----------------------------------------------------------------------------

Non-current liabilities
Trade and other payables                             115                 133
Financial liabilities - borrowings                19,814              22,873
Deferred tax                                      10,837              10,792
Provisions                                           862                 846
----------------------------------------------------------------------------
                                                  31,628              34,644

Current liabilities
Financial liabilities - borrowings                10,718               9,159
Derivative financial instruments                      71                 275
Current taxation                                     429                 398
Trade and other payables                          16,227              14,189
Provisions                                           311                 360
----------------------------------------------------------------------------
                                                  27,756              24,381

----------------------------------------------------------------------------
Total liabilities                                 59,384              59,025

Equity
Share capital                                     37,440              33,696
Share premium                                    321,803             321,803
Other reserves                                    43,248              43,166
Accumulated deficit                            (278,866)           (273,189)
Non-controlling interest                           6,094               6,094
----------------------------------------------------------------------------
Total equity                                     129,719             131,570

----------------------------------------------------------------------------
Total equity and liabilities                     189,103             190,595
----------------------------------------------------------------------------

Tethys Petroleum Limited
Consolidated Statements of Comprehensive Income (Loss)
(in thousands of US dollars except per share information)

                                                         Three months ended
                                                              March 31
                                                              2016      2015
----------------------------------------------------------------------------

Sales and other revenues                                    3,455     5,954
----------------------------------------------------------------------------



Sales expenses                                               (734)   (1,102)
Production expenses                                        (1,196)   (2,608)
Depreciation, depletion and amortisation                   (2,856)     (674)
Administrative expenses                                    (1,787)   (2,821)
Restructuring costs                                          (755)     (319)
Transaction costs of assets held for sale                       -      (120)
Share based payments                                          (82)     (147)
Profit on sale of fixed assets                                 10        14
Foreign exchange gain/(loss)                                   73        (6)
Fair value gain on derivative financial instrument            204     1,078
Loss from jointly controlled entity                             -      (250)
Finance costs                                              (1,930)     (579)
----------------------------------------------------------------------------
                                                           (9,063)   (7,534)

----------------------------------------------------------------------------
Loss before tax from continuing operations                 (5,598)   (1,580)

Taxation                                                      (79)     (454)

----------------------------------------------------------------------------
Loss from continuing operations                            (5,677)   (2,034)

Loss from discontinued operations net of tax                    -       (41)

----------------------------------------------------------------------------
Loss and total comprehensive income                        (5,677)   (2,075)

Loss and total comprehensive income attributable to:
Shareholders                                               (5,677)   (2,073)
Non-controlling interest                                        -        (2)

----------------------------------------------------------------------------
Loss and total comprehensive income                        (5,677)   (2,075)
----------------------------------------------------------------------------

Loss per share attributable to shareholders:
Basic and diluted - from continuing operations (USD)        (0.02)    (0.01)
Basic and diluted - from discontinued operations (USD)          -         -
----------------------------------------------------------------------------

Tethys Petroleum Limited
Consolidated Statements of Cash Flows
(in thousands of US dollars)
                                                        Three months ended
                                                             March 31
                                                            2016        2015
----------------------------------------------------------------------------

Cash flow from operating activities
Loss before tax from continuing operations               (5,598)     (1,580)
Loss before tax from discontinued operations                  -         (41)
----------------------------------------------------------------------------
                                                         (5,598)     (1,621)
Adjustments for:
Share based payments                                         82         146
Net finance cost                                          1,930         579
Depreciation, depletion and amortisation                  2,856         674
Profit on sale of fixed assets                                -         (15)
Fair value gain on derivative financial instruments        (203)     (1,078)
Net unrealised foreign exchange gain                        (64)       (121)
Loss from jointly controlled entity                           -         250
Movement in provisions                                     (791)       (793)
Net change in working capital                              (137)        641
----------------------------------------------------------------------------
Cash used in operating activities                        (1,925)     (1,338)
Corporation tax paid                                          -        (130)
----------------------------------------------------------------------------
Net cash used in operating activities                    (1,925)     (1,468)

Cash flow from investing activities:
Interest received                                             -          45
Expenditure on exploration and evaluation assets           (278)     (1,205)
Expenditure on property, plant and equipment               (116)       (742)
Proceeds from sale of fixed assets                            -          16
Movement in restricted cash                                 151          (4)
Movement in advances to construction contractors              4          91
Movement in value added tax receivable                      222         352
Net change in working capital                               (22)     (2,128)
----------------------------------------------------------------------------
Net cash used in investing activities                       (39)     (3,575)

Cash flow from financing activities:
Proceeds from issuance of borrowings, net of issue
 costs                                                    2,000       9,135
Repayment of borrowings                                    (340)       (467)
Interest paid on borrowings                              (1,169)       (354)
Movement in other non-current liabilities                   (47)        (28)
----------------------------------------------------------------------------
Net cash generated from financing activities                444       8,286
Effects of exchange rate changes on cash and cash
 equivalents                                               (619)       (124)
----------------------------------------------------------------------------
Net (decrease)/increase in cash and cash equivalents     (2,139)      3,119
Cash and cash equivalents at beginning of the period      3,272       3,868
----------------------------------------------------------------------------
Cash and cash equivalents at end of the period            1,133       6,987
----------------------------------------------------------------------------

Cash and cash equivalents at end of the period
 comprises:
Cash in assets of a disposal group held for sale              0       1,707
Cash and cash equivalents                                 1,133       5,280
----------------------------------------------------------------------------
                                                          1,133       6,987
----------------------------------------------------------------------------

Contacts:
Tethys Petroleum
info@tethyspetroleum.com
www.tethyspetroleum.com

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