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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| TSXV:PEC | TSX Venture | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0 | - |
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Tethys Petroleum Limited ("Tethys" or "the Company") (TSX:TPL)(LSE:TPL) today
announced its second quarter 2012 financial results. The results are underlined
by a 93% increase in revenues over the second quarter of last year.
The Company reports financial results in accordance with International Financial
Reporting Standards ("IFRS").
RECENT FINANCIAL HIGHLIGHTS
-- USD16 million loan facility secured
-- Q2 2012 Total Revenue was USD10.2 million (Q2 2011 USD4.2 million)
-- Q2 2012 average oil and gas production was 6,683 barrels of oil
equivalent per day (Q2 2011: 5,681 barrels of oil equivalent per day)
-- Q2 2012 average oil production from the Doris field in Kazakhstan was
2,927 barrels of oil per day (Q2 2011: 815 barrels of oil per day)
RECENT OPERATIONAL HIGHLIGHTS AND UPDATE
-- First shipment of commercial oil production through Aral Oil Terminal
(the "AOT") in Kazakhstan
-- Updated Kazakh independent Resource Report estimates the gross unrisked
recoverable mean prospective oil resources to be 1.23 billion barrels of
oil
-- AKD07 well to spud early September 2012
-- Akkulka Exploration Contract extended in Kazakhstan
-- Updated Tajik independent Resource Report estimates gross unrisked mean
recoverable resources are 27.5 billion barrels of oil equivalent (boe)
-- Awarded seismic contract in Tajikistan, work about to commence
-- Signed Production Enhancement Contract ("PEC") for a new oil field, the
Chegara Group of Fields ("Chegara"), in Uzbekistan
Kazakhstan
Production / development
In the second quarter commercial oil sales commenced through the Aral Oil
Terminal (the "AOT"), owned by Tethys and a 50% partner, which effectively
halved the oil trucking distance and provides better control over the oil sales.
Production was steadily increased over a period as each part of the sales chain
was optimised. Moving into the third quarter production was temporarily
disrupted in July due to an internal refinery issue that restricted rail cars
availability within all of Kazakhstan. This issue has now been resolved and
production has again reached approximately 4,000 bopd.
AOT Phase 2 construction that will allow a throughput capacity of up to 6,000
bopd is progressing on schedule with 2 x 1000 m3 tanks (approximately 12,500
bbls) having already been installed and with work currently focussing on the
installation of associated dehydration and pumping equipment. Phase 2 of the AOT
is expected to be fully operational by October 2012. With the current well stock
it is forecast that a production rate of between 4,500 and 5,000 bopd can be
achieved on a continual basis. Higher rates can be achieved but it is believed
that these rates are most optimal for this reservoir with the current wells.
Appraisal / exploration
The AKD07 appraisal/exploration well is located to the south-east of the
original AKD01 (Doris) discovery well and will target 3P reserves at the
Cretaceous Aptian sand level in what is believed to be a channel sand system,
whilst simultaneously targeting an exciting exploration prospect (named "Dyna"),
which has been identified on the recently acquired seismic data from a bright
amplitude anomaly at a slightly shallower level, and is interpreted to be part
of a different, larger sand fan system. This Dyna prospect has 128 million
barrels gross mean unrisked recoverable prospective resources attributed to it
(Gustavson Associates). It is also targeting a third horizon, a Jurassic
sandstone. The well is expected to spud in the second week of September 2012 and
is forecast to take approximately 55 days to drill to a depth of 2,540 meters
using Tethys' own ZJ70 "Telesto" rig. It is then expected to take approximately
one month to run logs, complete the well (assuming the logs are positive),
receive State permissions and then test the well. The recently updated
prospective resource report for Kazakhstan (Gustavson Associates) estimates
gross unrisked recoverable mean prospective oil resources of 1.23 billion
barrels of oil and this is the first well since that report to target this
exciting exploration upside.
Final signatures on the approval for the extension of the Akkulka Exploration
Contract until March 10th 2015 have now been received from the Ministry of Oil
and Gas (MOG) and this will allow the Company to further appraise Doris and
Dione Discoveries as well as explore wider within the block in targets
highlighted by the recent Kazakh Resource Report.
Tajikistan
The Tajik Resource Report, independently produced by Gustavson Associates,
calculated a total gross mean unrisked recoverable prospective resource of 27.5
billion boe across the Bokhtar PSC.
The Tajik seismic programme will commence in late August as most equipment is
now in country and the contracted company "Prospectiuni" has completed the
preliminary set-up and testing work. The programme, up to 870 km of 2D seismic
acquisition, is designed to identify a drilling location for the first deep well
expected to commence in 2013.
The initial analysis of the data from the aerial graviometry survey completed at
the end of 2011 revealed several attractive prospective areas with the potential
presence of very large deep sub-salt and sub-thrust prospects within the Bokhtar
Production Sharing Contract ("PSC") Area. The additional seismic about to be
acquired will target these areas and provide the final data in a comprehensive
programme to optimally locate a deep well.
This final stage of the seismic programme will involve the acquisition of new
seismic in two areas; the Vaksh Valley and the Dushanbe Step. The programme has
been designed to target these areas as the graviometry survey and other data
have identified them to be the most likely to contain large deep prospects
including potential Jurassic reefs located on the edge of likely Permian
basement high features. Jurassic reefs form some of the most prolific fields in
the Amu Darya basin (of which the Bokhtar PSC area forms part) and no wells have
ever been drilled through the overlying salt layer into that horizon in this
region of Tajikistan to date. This basin is extremely prolific containing oil,
gas and condensate fields and indeed some of the world's largest gas fields are
located in this basin. These data also reveal significant potential in other
parts of the PSC Area, including the Kulob area, however it has been decided to
focus on the Vaksh Valley and the Dushanbe Step initially.
It is expected that this new seismic programme will further confirm the high
potential in the Tethys PSC acreage. Tethys now owns an 85% interest in the
Bokhtar PSC following the recent acquisition of an additional 34% interest from
its partner in the project. Tethys continues to hold discussions with numerous
potential farminees with the aim of concluding an agreement by year-end.
Further evaluation of the Beshtentak Field has been carried out in light of the
initial success of the BST20 well. Three to four other candidates have been
identified for workovers in different horizons and well preparation work is
expected to commence at the end of August with initial results expected in late
September.
Uzbekistan
Progress continues in Uzbekistan where Tethys recently announced Chegara
Production Limited ("CPL"), its 100% owned subsidiary, signed a Production
Enhancement Contract ("PEC") for a new oil field, the Chegara Group of Fields
("Chegara"). In addition Tethys signed a Memorandum of Understanding ("MOU"),
which agrees a timetable for the potential signing of an Exploration Agreement a
highly prospective Exploration block in the North Ustyurt Basin.
The Chegara Group is an underdeveloped group of fields located 14 kilometers
south-west of the existing Tethys asset of North Urtabulak, and contiguous to
the prolific Urtabulak gas condensate Field, within the world-class Amu Darya
Basin. The reservoirs comprise Upper Jurassic age carbonates at an approximate
depth of 2,650 meters, trapped below a regionally prevalent salt and anhydrite
seal. The oil is of moderate gravity and at present there are 3 producing wells
all flowing naturally under reservoir pressure. This currently has limited
existing oil production, and will form the baseline production under the new
Chegara PEC with Uzbekneftegaz. Tethys believes there is substantial additional
production potential in the field.
Tethys has collected and interpreted a significant volume of historic seismic,
drilling, geological and production data relating to the Chegara Group of
fields, and plans to initially work over the existing well stock using
technologies and techniques that have been successfully implemented to increase
production on the North Urtabulak Field over the previous 12 years under a very
similar contractual arrangement. Furthermore, it is intended that additional
geophysical data will be acquired on the field to identify undrilled areas that
provide high potential upside. Currently there are only State reserves assigned
to the field and no figures yet under NI 51-101 reporting procedures.
The contract will become effective following standard regulatory approvals,
which include the issuance of a Presidential Decree and the completion of a
Feasibility Study. The PEC has a term of twenty-five (25) years and under the
new PEC CPL is allocated refined products for the crude oil it produces and
sells these outside Uzbekistan. Furthermore Tethys has been granted exclusive
rights to carry out operations with liquid hydrocarbons on Chegara.
The MOU signed with NHC Uzbekneftegaz sets out a fixed timetable to potentially
sign an Exploration Agreement for a large Exploration block in the North Usyturt
basin in Uzbekistan. TPL submitted a proposal for an exploration program for the
block in June 2012. Once approved by NHC Uzbekneftegaz and the Government of the
Republic of Uzbekistan an Exploration Agreement will be negotiated.
Gross production under the existing North Urtabulak PEC remains fairly constant
at approximately 675 bopd.
The full Q2 Results together with a Management 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 Tethys' website at
www.tethyspetroleum.com. The summary financial statements are attached to this
press release.
The above highlights along with other operational and financial details will be
further discussed in a scheduled conference call. Details of the conference call
can be found below:
Conference Call:
A conference call will be held at 8:00 AM Eastern Standard Time 1:00 PM British
Summer Time on Wednesday, August 15, 2012. The North American conference call
number is 866.383.8008 and the outside North America conference call number is
+1-617.597.5341. The conference call code to use is 72526728. Please call in
about 10 minutes before the starting time in order to be patched into the call.
Webcast:
The call is being webcast and can be accessed at:
http://phoenix.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=213714&eventID=4822812
Tethys is focused on oil and gas exploration and production activities in
Central Asia with activities currently in the Republics of Kazakhstan,
Tajikistan and Uzbekistan. 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. Such
forward-looking statements reflect our current views with respect to future
events and are subject to certain risks, uncertainties and assumptions. See our
Annual Information Form for the year ended December 31, 2011 for a description
of risks and uncertainties relevant to our business, including our exploration
activities. 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.
Tethys Petroleum Limited
Condensed Consolidated Statement of Financial Position
(Unaudited)
(in US Dollars)
As at
June 30, 2012 December 31, 2011
$'000 $'000
Non-current assets
Property, plant and equipment 122,793 128,918
Intangible assets 101,567 99,959
Restricted cash 1,407 1,407
Prepayments and other receivables 10,404 10,217
Investment in jointly controlled entity 1,118 1,113
---------------- ------------------
237,289 241,614
---------------- ------------------
Current assets
Inventories 2,075 2,025
Trade and other receivables 7,130 5,478
Loan receivable from jointly controlled
entity 2,213 2,013
Cash and cash equivalents 3,972 10,746
Restricted cash 474 885
Derivative financial instruments -
interest rate swap - 630
---------------- ------------------
15,864 21,777
---------------- ------------------
Total assets 253,153 263,391
---------------- ------------------
---------------- ------------------
Equity attributable to shareholders
Share capital 28,671 28,669
Share premium 306,725 306,725
Other reserves 40,557 38,530
Accumulated deficit (156,521) (144,962)
Non-controlling interest 8,759 8,918
---------------- ------------------
Total equity 228,191 237,880
---------------- ------------------
Non-current liabilities
Financial liabilities - borrowings 2,595 1,632
Deferred taxation 2,472 2,111
Trade and other payables 452 547
Asset retirement obligations 233 386
---------------- ------------------
5,752 4,676
---------------- ------------------
Current liabilities
Financial liabilities - borrowings 9,661 8,396
Derivative financial instruments -
warrants 540 264
Derivative financial instruments -
foreign currency hedge - 157
Deferred revenue 1,395 1,839
Trade and other payables 7,404 10,179
Current tax 210 -
---------------- ------------------
19,210 20,835
---------------- ------------------
---------------- ------------------
Total liabilities 24,962 25,511
---------------- ------------------
Total shareholders' equity and
liabilities 253,153 263,391
---------------- ------------------
---------------- ------------------
Tethys Petroleum Limited
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
For the six months ended June 30, 2012
(in US Dollars)
For the 3 months ended For the 6 months ended
June 30, June 30, June 30, June 30,
2012 2011 2012 2011
$'000 $'000 $'000 $'000
Sales and other revenues 10,204 4,177 16,691 8,657
Other operating income - 5,706 - 5,706
-----------------------------------------------
Total revenue and other
income 10,204 9,883 16,691 14,363
Production expenses (2,930) (1,773) (5,840) (3,525)
Depreciation, depletion and
amortisation (4,755) (3,215) (7,791) (5,827)
Listing expenses - (327) - (333)
Business development
expenses (395) (1,208) (579) (1,229)
Administrative expenses (5,771) (5,391) (10,757) (10,661)
Share based payments (1,274) (864) (1,877) (2,057)
Foreign exchange (loss) /
gain - net (112) 16 (176) 216
Fair value gain / (loss) on
derivative financial
instrument 829 (315) (67) (323)
Profit / (loss) from jointly
controlled entity 163 (302) 101 (511)
Net finance (costs) / income (398) 725 (852) 718
-----------------------------------------------
Loss before taxation (4,439) (2,771) (11,147) (9,169)
Taxation (431) 75 (571) 178
-----------------------------------------------
Loss for the period (4,870) (2,696) (11,718) (8,991)
-----------------------------------------------
-----------------------------------------------
Loss attributable to:
Shareholders (4,811) (2,696) (11,559) (8,991)
Non-controlling interest (59) (159)
-----------------------------------------------
Loss for the period (4,870) (2,696) (11,718) (8,991)
-----------------------------------------------
-----------------------------------------------
Loss per share attributable
to shareholders
Basic and diluted (0.02) (0.01) (0.04) (0.03)
Tethys Petroleum Limited
Condensed Consolidated Statement of Cash Flows
(Unaudited)
For the three and six months ended June 30, 2012
(in US dollars)
For the 3 months ended For the 6 months ended
June 30, June 30, June 30, June 30,
2012 2011 2012 2011
$'000 $'000 $'000 $'000
Cash flow from operating
activities
Loss before taxation for the
period (4,439) (2,771) (11,147) (9,169)
Adjustments for
Share based payments 1,274 864 1,877 2,057
Net finance cost /
(income) 398 (723) 852 (716)
Depreciation, depletion
and amortization 4,755 3,215 7,791 5,827
Loss on disposal of assets - 136 - 136
Fair value (gain) / loss
on derivative financial
instrument (829) 315 67 323
Net unrealised foreign
exchange loss (47) 5 (12) 48
(Profit) / Loss from
jointly controlled entity (163) 302 (101) 511
Deferred revenue 65 646 (444) (1,776)
Other operating income - (5,706) - (5,706)
Net change in non-cash
working capital (425) 1,091 (1,987) 769
-----------------------------------------------
Net cash generated / (used)
in operating activities 589 (2,626) (3,104) (7,696)
-----------------------------------------------
Cash flow from investing
activities
Interest received (83) 44 5 76
Expenditure on exploration
and evaluation assets (607) (4,423) (1,602) (6,289)
Expenditures on property,
plant and equipment (1,494) (10,411) (1,708) (19,397)
Movement in restricted cash 150 (3,549) 411 (3,551)
Investment in jointly
controlled entity (2) - (5) -
Payments made on behalf of
jointly controlled entity - (4,486) - (7,364)
Movement in advances to
construction contractors (1,401) 1,710 (1,034) (117)
Movement in value added tax
receivable 790 (1,248) 847 (2,153)
Net change in non-cash
working capital (1,121) 406 (2,400) 354
-----------------------------------------------
Net cash used in investing
activities (3,768) (21,957) (5,486) (38,441)
-----------------------------------------------
Cash flow from financing
activities
Proceeds from issuance of
short-term borrowings, net
of issue costs 3,509 - 7,029 -
Proceeds from issuance of
long-term borrowings, net
of issue costs - - 2,306 -
Repayment of long-term
borrowings (251) (90) (407) (176)
Repayment of short-term
borrowings - - (6,459) -
Interest paid on borrowings (317) (97) (521) (197)
Other non-current
liabilities (68) (75) (142) (151)
-----------------------------------------------
Net cash generated / (used)
in financing activities 2,873 (262) 1,806 (524)
-----------------------------------------------
Effects of exchange rate
changes on cash and cash
equivalents 98 (209) 10 (128)
Net decrease in cash and
cash equivalents (208) (25,054) (6,774) (46,789)
Cash and cash equivalents at
beginning of the period 4,180 57,400 10,746 79,135
-----------------------------------------------
Cash and cash equivalents at
end of the period 3,972 32,346 3,972 32,346
-----------------------------------------------
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