Tethys Petroleum Corporate Update
Rhea-AI Summary
Tethys Petroleum (TSXV: TPL) has provided several key updates. The company withdrew its application to transition Contract No. 1897 for the Kul Bas field to Production Period, as current distribution channels under testing production contract offer higher revenue potential. The testing production contract expires on July 26, 2026.
Tethys entered an agreement with NatGaz Company LLP for natural gas sales, receiving a prepayment and expecting to resume gas production around February 15, 2025. At current pricing, gas revenue is anticipated to generate over $700,000/month. The company plans to rehire gas production employees effective February 7, 2025.
The company announced a dividend of $0.01/share (USD) for shareholders of record on February 10, with payment expected on February 20, 2025. This marks the first dividend since February 2023, following delays in payments from Kazakh Gas and production contract approval.
AI-generated analysis. Not financial advice.
Positive
- Expected gas revenue of over $700,000/month from new NatGaz Company agreement
- Resumption of dividend payments at $0.01 per share
- Higher revenue potential through current distribution channels versus production contract
Negative
- Production constrained by current oil handling facilities to 3 wells
- Gas utilization capacity limiting production growth
- Infrastructure upgrades ('Phase 2') delayed until year-end
- Significant upcoming capital expenditure requirements
News Market Reaction – TETHF
On the day this news was published, TETHF declined 14.29%, reflecting a significant negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Grand Cayman, Cayman Islands--(Newsfile Corp. - February 3, 2025) - Tethys Petroleum Limited (TSXV: TPL) ("Tethys" or the "Company") is pleased to provide the following updates regarding its regulatory progress and operational milestones at the Kul Bas oil field.
Regulatory Update
On January 31, 2025, Kul-Bas LLP withdrew its application to the Ministry of Energy of the Republic of Kazakhstan to transition Contract No. 1897 for the Kul Bas field to the Production Period. While other reasons also played a part, it was determined upon further analysis that the company would likely achieve higher revenue by continuing to sell through the current distribution channels allowed under the testing production contract rather than the distribution channels required by the production contract. The production contract would have some component allowed for the export market and some for the domestic market. Given the high taxes for sales in the export market, Tethys is currently incentivized to sell the oil for export under the allowance to domestic mini-refineries (as it is currently). The oil which would be sold under the domestic component would need to be sold to the state refineries and wouldn't be allowed to be sold to the mini-refineries. Depending on which state refinery the Ministry of Energy would require, the discount in the oil price would be estimated to be about 10
Operational Update
The Company has entered into an agreement with NatGaz Company LLP to be a buyer of Tethys natural gas. Tethys has received a prepayment on the gas and an official letter that the Buyer is able to start accepting the gas around February 15, 2025. The Company is in the process of preparing the resumption of gas production and anticipates rehiring employees associated with the gas production effective February 7, 2025. At current pricing, it is anticipated resumption of the gas revenue will allow for over
Dividend Update
Tethys hasn't paid a dividend since February of 2023. The approximate 2 year delay in payments from Kazakh Gas on gas sold and the delays in approval for the production contract impacted Tethys's ability to return cash to shareholders. The settlement of the balance due from Kazahk Gas, the initiation of new oil sales and the ability to sell oil under the production contract enhances Tethys ability to fund expenses and pay dividends. While Tethys has significant upcoming capital expenditure requirements to fund for the foreseeable future, returning cash to shareholders also remains a goal for the Company. Tethys will pay a $.01/share (USD) dividend to shareholders of record on February 10 with an expected pay date of February 20, 2025.
About Tethys
Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region.
Disclaimer
Some of the statements in this document are forward-looking. No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company or any other entity and shareholders of the Company are cautioned not to place undue reliance on the forward-looking statements. Save as required by applicable law, the Company does not undertake to update or change any forward-looking statements to reflect events occurring after the date of this announcement.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contact Information:
Tethys Petroleum
Casey McCandless
Chief Financial Officer
901-763-4001
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/239491