DUSHANBE, TAJIKISTAN--(Marketwire - Oct. 26, 2012) - Tethys Petroleum Limited ("Tethys" or "the Company") (TSX:TPL)(LSE:TPL) today announced that Kulob Petroleum Limited, its subsidiary, which is the Contractor party to the Bokhtar Production Sharing Contract ("Bokhtar PSC") in Tajikistan, has signed a Memorandum of Understanding ("MOU") to execute a farmout agreement on the PSC. The potential acquiring party is an international oil and gas company ("IOC").
Based on the terms contained in the MOU, the parties will now negotiate a farmout agreement and a joint operating agreement, which are planned to be executed in the near future, whereupon the farmee and all commercial terms will be disclosed. The farmout is subject to final agreement on the commercial and legal issues, finalisation of due diligence and Tajik governmental approval. A period of exclusivity has been granted to the farmee during the negotiations.
The 25-year Bokhtar PSC was signed in 2008 and covers a total area of approximately 35,000 sq. km (8.65 million acres) in the Afghan Tajik portion of the prolific Amu Darya basin west of the Pamir mountains. The area included in the PSC is in the south-western part of Tajikistan and is a large, highly prospective region which has existing oil and gas discoveries but which has seen limited exploration to date. An independent Resource Report (dated June 30, 2012) estimates Gross unrisked mean recoverable resources of 27.5 billion barrels of oil equivalent, consisting of 114 trillion cubic feet (3.22 trillion cubic metres) of gas and 8.5 billion barrels of oil.
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. The use of the word "Gross" means 100% of the PSC.