TBILISI, GEORGIA -- (Marketwired) -- 07/08/13 -- Tethys Petroleum Limited (TSX: TPL)(LSE: TPL) ("Tethys"), the oil and gas exploration and production company focused on Central Asia/Caspian Region, today announced the conditional acquisition of interests in a number of production sharing contracts ("PSCs") in Georgia.
Tethys, through its subsidiary companies, will acquire a 56% interest in PSC's covering Blocks XIA, XIM and XIN in eastern Georgia close to the capital city Tbilisi, and in a separate transaction will acquire a 100% interest in PSC's covering Block VIII and Block XIG located near Tbilisi and in the Kartli area further west. In total, these blocks cover an area of over 6,400 square kilometres. Tethys will be the Operator of all these PSC's and the transactions are subject to the approval of the appropriate Georgian authorities as well as other conditions precedent including rescheduling of the work programmes on Blocks VIII and XIG.
-- In the Block XIA, XIM and XIN transaction (Project "Iberia") Tethys will gain a 56% interest in these three PSCs for a payment of USD 9.6 million, which will be paid to the current owners by issuing 12,000,000 ordinary shares in Tethys (based on a price of CDN 0.84 per share) and funding a USD 4.4 million carry on the next USD 10 million work programme. The shares will be restricted from trading for 4 months and their issuance is subject to TSX approval.-- In the Block VIII and XIG transaction (Project "Tamar") Tethys will gain a 100% interest in these PSC's for a payment of USD 6.4 million, which will be paid to the current owners by issuing 8,000,000 ordinary shares in Tethys (based on a price of CDN 0.84 per share). These shares will be restricted from trading for 4 months and their issuance is subject to TSX approval.-- Completion of both transactions is conditional on appropriate Georgian governmental consent and on the waiver of any pre-emptive rights the Georgian government may have, together with satisfactory completion of Tethys' due diligence. In addition, the Project Tamar transaction is dependent on the restructuring of future work programme commitments related to these PSCs. Completion is expected to take place in Q3/Q4 2013.-- The areas contain potential for both conventional and unconventional oil and gas at several different horizons.-- An independent resource assessment (utilizing both seismic and well data) has been carried out on three Project Iberia blocks by Gustavson Associates in accordance with Canadian National Instrument 51-101 results in total Unrisked Mean Recoverable Prospective Resources in excess of 3.2 billion barrels oil equivalent. The key results (all figures Gross to the PSCs) are as follows: -- Unrisked Mean Prospective Oil in Place - 34.8 billion barrels -- Unrisked Mean Prospective Recoverable crude oil - 2.913 billion barrels -- Comprising: -- 380 million barrels of conventional resources and; -- 2,533 million barrels of unconventional resources -- Unrisked Mean Prospective Associated Gas - 1.815 trillion cubic feet (51.4 billion cubic metres) -- Total Unrisked Mean Prospective Recoverable Resources - 3.215 billion barrels oil equivalent-- No independent resource assessment has yet been carried out on the Project Tamar Blocks - this work is currently underway.-- The partners in the Project Iberia Blocks are well-established Georgian oil and gas companies and Tethys expects to work closely with their specialists in implementation of Tethys' operatorship of all the PSCs. Discussions are also underway with these companies to potentially swap equity between the Iberia and Tamar blocks giving shared ownership in all of this acreage.-- The PSCs provide good commercial terms and international oil pricing in proximity to two large oil pipelines, a trunk gas pipeline and a railway. The PSCs are located in Central Georgia near the capital city and hub of Tbilisi and on the main transport routes from Azerbaijan and Central Asia. The operating environment in Georgia is straightforward with several service companies available and with an efficient procedure for obtaining the limited governmental consents which are not already given as part of the PSCs.