www.tethyspetroleum.com
Tethys Petroleum Limited's strategy is to create shareholder value by building an oil and gas exploration and production company focused on Central Asia in areas with substantial oil and gas potential, building on the strengths of its management team and with a mix of short-term cash flow and upside potential. Currently Tethys has projects in Kazakhstan, Tajikistan and most recently Uzbekistan. Tethys is listed on the Toronto Stock Exchange in Canada and on the Kazakhstan Stock Exchange (KASE: GG_TPL_)
Tethys Petroleum says exploration campaign in Tajikistan firmly on track, shares rise
Tethys Petroleum (LON:TPL, TSE:TPL) said its option deal over the Bokhtar project in Tajikistan could result in a multiple of its cost in shareholder value, adding that it is firmly on track to locate the first deep well next year.
Investors welcomed today’s report from Tethys, sending shares in the company up 8.5 percent to trade at 34 pence this morning, giving Tethys a market cap of £88.6 million.
The Bokhtar production sharing contract (PSC), which is the Central Asian focused company’s main project, currently has an unrisked prospective resource of 1.14 billion barrels of oil equivalent.
Tethys, which currently owns a 51 percent stake in Bokhtar, has signed an option agreement for the right to acquire 34 percent of partner Sangam for US$7 million, which would take its interest in the project to 85 percent.
Tethys has so far funded 100 percent of oil and gas activities through a loan to its joint venture with Sagnam Seven Stars Energy (SSEC), which stood at US$49.92 million at April 1 this year. After the option agreement is exercised, this loan will be reduced to zero.
As a result of the deal, Tethys will acquire more than 388 million barrels of prospective resources and have greater rights to reserves in the Beshtentak field that are currently not evaluated.
“This is an incredible opportunity to increase our equity holding in one of our key assets in an area that has huge geological upside with excellent fixed commercial terms over 25 years,” said chairman and chief executive of Tethys David Robson.
Tethys also noted that oil production now covers all in-country costs and it aims to increase output in 2012 with further work on Beshtentak.
A detailed data acquisition programme is well underway, and is expected to conclude next year with Tethys planning to identify the location of a deep well targeting the undrilled subsalt horizons by the end of 2012.
“This acquisition should result in a multiple of its cost in resulting shareholder value should we execute our program in Tajikistan and demonstrate further success going forward,” added Robson.
Under the terms of the PSC, Tethys takes 91% of the oil and gas during the cost recovery period and 70 percent after costs have been recovered.
The Bokhtar PSC area includes almost the entire Tajik portion of the Afghan-Tajik basin.
This basin is part of and an extension of the Amu-Darya basin, one of the most prolific gas and condensate basins in the world. The Amu-Darya basin has many giant fields such as the South Yolotan Field in Turkmenistan with reserves of 749 trillion cubic feet.
According to Tethys, Tajikistan could have similar potential.
