FOR: TETHYS PETROLEUM LIMITED
TSX, LSE SYMBOL: TPL
May 13, 2016
Tethys Petroleum Limited Press Release: 2016 Q1 Results
GRAND CAYMAN, CAYMAN ISLANDS--(Marketwired - May 13, 2016) - 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
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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
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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
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8,278 8,076
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Total assets 189,103 190,595
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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
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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
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27,756 24,381
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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
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Total equity 129,719 131,570
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Total equity and liabilities 189,103 190,595
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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
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Sales and other revenues 3,455 5,954
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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)
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(9,063) (7,534)
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Loss before tax from continuing operations (5,598) (1,580)
Taxation (79) (454)
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Loss from continuing operations (5,677) (2,034)
Loss from discontinued operations net of tax - (41)
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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)
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Loss and total comprehensive income (5,677) (2,075)
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Loss per share attributable to shareholders:
Basic and diluted - from continuing operations (USD) (0.02) (0.01)
Basic and diluted - from discontinued operations (USD) - -
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Tethys Petroleum Limited
Consolidated Statements of Cash Flows
(in thousands of US dollars)
Three months ended
March 31
2016 2015
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Cash flow from operating activities
Loss before tax from continuing operations (5,598) (1,580)
Loss before tax from discontinued operations - (41)
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(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
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Cash used in operating activities (1,925) (1,338)
Corporation tax paid - (130)
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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)
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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)
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Net cash generated from financing activities 444 8,286
Effects of exchange rate changes on cash and cash
equivalents (619) (124)
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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
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Cash and cash equivalents at end of the period 1,133 6,987
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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
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1,133 6,987
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FOR FURTHER INFORMATION PLEASE CONTACT:
Tethys Petroleum
info@tethyspetroleum.com
www.tethyspetroleum.com
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