August 15, 2016 - 4:00 PM EDT
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Tethys Petroleum Limited Press Release: 2016 Q2 Results

GRAND CAYMAN, CAYMAN ISLANDS--(Marketwired - Aug. 15, 2016) - Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) today announced its Results for the quarter ended June 30, 2016.

Q2 Financial Highlights (all figures reported in USD unless stated otherwise. 2015 amounts are for the quarter ended June 30, 2015).

  • Oil and gas revenue down 48% to USD3.5m (2015: USD6.8m);
  • Production expenses down 68% to USD1.3m (2015: USD4.2m);
  • G&A expenses down 60% to USD1.2m (2015: USD3.1m);
  • Loss of USD4.9m (2015: USD25.3m) due to lower depreciation, depletion and amortisation;
  • Capital expenditure down 92% due to lower spend on the Company's assets relating to Kazakhstan exploration and development and Tajikistan exploration;
  • Net debt increased as a result of interim finance obtained as part of larger strategic transactions which are ongoing.

Q2 Operational Highlights

Oil

  • Current quarter oil production averaged 965 bopd compared with 1,954 bopd in Q2 2015, reflecting a natural decline in overall production as well as prolonged spring oil trucking disruption;
  • Oil production cost per barrel in the current quarter reduced to USD7.73 compared with USD7.81 in Q2 2015 despite lower production volume as a result of cost reductions initiatives as well as the devaluation of the Kazakhstan currency, the Tenge;
  • Oil prices averaged USD7.94 per bbl in the quarter compared with USD13.00 per bbl in Q2 2015, a reduction of 39%, reflecting the fall in World oil price and the devaluation of the Tenge.

Gas

  • Current quarter gross gas production averaged 2,312 boe/d compared with 3,250 boe/d in Q2 2015, reflecting a natural decline in overall production;
  • Gas production cost per Mcm in the current quarter reduced to USD16.84 compared with USD22.90 in Q2 2015 despite lower production volume as a result of 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.

Note: 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.

Q2 Corporate Highlights

  • All resolutions put to shareholders at the Annual General and Special Meeting held on May 31, 2016 were passed on a poll at the meeting including the transaction with Olisol;
  • The Company received the first USD1 million drawdown of a newly agreed USD10 million loan facility from a leading Kazakhstan bank;
  • Total and CNPC, the Company's partners in Tajikistan filed for arbitration proceedings at the International Court of Arbitration in relation to the Company's cash call defaults and the partners' notice to withdraw;
  • The full Q2 Results together with Management's Discussion & 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.

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 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  
    June 30,
2016
    December 31,
2015
 
             
Non-current assets            
Intangible assets   66,626     64,202  
Property, plant and equipment   107,903     113,397  
Restricted cash   2,235     2,233  
Investment in joint arrangements   4     4  
Trade and other receivables   2,235     2,457  
Deferred tax   215     226  
    179,218     182,519  
             
Current assets            
Cash and cash equivalents   700     3,272  
Trade and other receivables   4,747     3,710  
Inventories   904     879  
Restricted cash   65     215  
    6,416     8,076  
             
Total assets   185,634     190,595  
             
Non-current liabilities            
Trade and other payables   93     133  
Financial liabilities - borrowings   2,114     22,873  
Deferred tax   10,362     10,792  
Provisions   878     846  
    13,447     34,644  
Current liabilities            
Financial liabilities - borrowings   28,388     9,159  
Derivative financial instruments   6     275  
Current taxation   460     398  
Trade and other payables   15,760     14,189  
Provisions   147     360  
    44,761     24,381  
             
Total liabilities   58,208     59,025  
             
Equity            
Share capital   40,000     33,696  
Share premium   321,803     321,803  
Other reserves   43,329     43,166  
Accumulated deficit   (283,642 )   (273,189 )
Non-controlling interest   5,936     6,094  
Total equity   127,426     131,570  
             
Total equity and liabilities   185,634     190,595  
             
   
Tethys Petroleum Limited  
Consolidated Statements of Comprehensive Income (Loss)  
(in thousands of US dollars except per share information)  
   
    Three months ended
June 30
    Six months ended
June 30
 
    2016     2015     2016     2015  
                         
Sales and other revenues   3,529     6,838     6,984     12,792  
                         
Sales expenses   (733 )   (1,279 )   (1,467 )   (2,381 )
Production expenses   (1,328 )   (4,159 )   (2,524 )   (6,767 )
Depreciation, depletion and amortisation   (2,927 )   (20,614 )   (5,783 )   (21,288 )
Administrative expenses   (1,230 )   (3,103 )   (3,025 )   (5,924 )
Restructuring costs   (676 )   (1,613 )   (1,423 )   (1,932 )
Transaction costs of assets held for sale   -     (945 )   -     (1,065 )
Share based payments   (81 )   (118 )   (163 )   (265 )
Profit on sale of fixed assets   -     29     10     43  
Foreign exchange gain/(loss)   50     (208 )   123     (215 )
Fair value gain/(loss) on derivative financial instrument   65     (1,547 )   269     (469 )
Profit/(loss) from jointly controlled entity   -     15     -     (235 )
Finance costs   (2,012 )   (1,949 )   (3,942 )   (2,527 )
    (8,872 )   (35,491 )   (17,925 )   (43,025 )
                         
Loss before tax from continuing operations   (5,343 )   (28,653 )   (10,941 )   (30,233 )
                         
Taxation   409     3,375     330     2,921  
                         
Loss from continuing operations   (4,934 )   (25,278 )   (10,611 )   (27,312 )
                         
Loss from discontinued operations net of tax   -     (36 )   -     (77 )
                         
Loss and total comprehensive income   (4,934 )   (25,314 )   (10,611 )   (27,389 )
                         
Loss and total comprehensive income attributable to:                        
Shareholders   (4,776 )   (25,313 )   (10,453 )   (27,386 )
Non-controlling interest   (158 )   (1 )   (158 )   (3 )
                         
Loss and total comprehensive income   (4,934 )   (25,314 )   (10,611 )   (27,389 )
                         
Loss per share attributable to shareholders:                        
Basic and diluted - from continuing operations (USD)   (0.01 )   (0.08 )   (0.03 )   (0.08 )
Basic and diluted - from discontinued operations (USD)   -     -     -     -  
                         
   
Tethys Petroleum Limited  
Consolidated Statements of Cash Flows  
(in thousands of US dollars)  
   
    Three months ended
June 30
    Six months ended
June 30
 
Cash flow from operating activities                        
Loss before tax from continuing operations   (5,343 )   (28,653 )   (10,941 )   (30,233 )
Loss before tax from discontinued operations   -     (36 )   -     (77 )
                         
Adjustments for:                        
Share based payments   81     118     163     265  
Net finance cost   2,012     1,949     3,942     2,527  
Depreciation, depletion and amortisation   2,927     20,614     5,783     21,288  
Profit on sale of fixed assets   (10 )   (29 )   (10 )   (43 )
Fair value gain on derivative financial instruments   (65 )   1,547     (269 )   469  
Net unrealised foreign exchange (gain)/loss   (293 )   147     (357 )   26  
(Profit)/loss from jointly controlled entity   -     (15 )   -     235  
Movement in provisions   (845 )   (1,197 )   (1,636 )   (1,990 )
Net change in working capital   (79 )   1,474     (216 )   2,115  
Cash used in operating activities   (1,615 )   (4,081 )   (3,541 )   (5,418 )
Corporation tax paid   (21 )   (4 )   (21 )   (134 )
Net cash used in operating activities   (1,636 )   (4,085 )   (3,562 )   (5,552 )
                         
Cash flow from investing activities:                        
Interest received   -     46     -     91  
Expenditure on exploration and evaluation assets   (177 )   (2,737 )   (455 )   (3,942 )
Expenditure on property, plant and equipment   (165 )   (1,297 )   (281 )   (2,039 )
Proceeds from sale of fixed assets   33     113     33     113  
Movement in restricted cash   (3 )   (147 )   148     (151 )
Movement in advances to construction contractors   (203 )   99     (199 )   190  
Movement in value added tax receivable   206     368     428     719  
Net change in working capital   61     605     39     (1,522 )
Net cash used in investing activities   (248 )   (2,950 )   (287 )   (6,541 )
                         
Cash flow from financing activities:                        
Proceeds from issuance of borrowings, net of issue costs   1,500     9,100     3,500     18,235  
Repayment of borrowings   (234 )   (4,198 )   (574 )   (4,665 )
Interest paid on borrowings   (544 )   (554 )   (1,713 )   (908 )
Movement in other non-current liabilities   (21 )   (27 )   (68 )   (56 )
Net cash generated from financing activities   701     4,321     1,145     12,606  
Effects of exchange rate changes on cash and cash equivalents   750     669     132     561  
Net (decrease)/increase in cash and cash equivalents   (433 )   (2,045 )   (2,572 )   1,074  
Cash and cash equivalents at beginning of the period   1,133     6,987     3,272     3,868  
Cash and cash equivalents at end of the period   700     4,942     700     4,942  
                         

Tethys Petroleum
[email protected]
Web: http://www.tethyspetroleum.com


Source: Marketwired (August 15, 2016 - 4:00 PM EDT)

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