OilVoice - Tethys Oil Announces Successful Drilling in Oman

Tethys Oil Announces Successful Drilling in Oman

Friday, August 20, 2010

The Saiwan East-4 well ("SE-4") on Block 4 onshore the Sultanate of Oman has successfully been drilled and preliminary results evaluated. The well was drilled 2.9 kilometers to the southeast of the Saiwan East-3 well to a total depth of 2,463 metres. Several oil bearing layers were encountered including the Khufai limestone formation from which 78 metres of core was extracted. Above the Khufai formation oil was also encountered in the Buah and Miqrat formations. Exploration objectives below the Khufai were drilled without any significant oil shows.

As yet the properties and quality of the oils encountered in the various layers have not been ascertained but the results are sufficiently encouraging to warrant production tests that will be carried out later this year using a smaller rig.

The current rig has been moved to the Farha South location on Block 3 to drill the well FS-4 which is being drilled as a production well close to FS-3 that was drilled last year.

Tethys has a 30 per cent interest in Blocks 3 and 4. Partners are Mitsui E&P Middle East B.V. with 20 per cent and the operator CC Energy Development S.A.L. (Oman branch) holding the remaining 50 per cent.

Tethys Oil has also today released a report for the six month period ending 30 Hune 2010.

Highlights
• On May 19th, Tethys entered into a Farmout Agreement with Mitsui E&P Middle East B.V., a subsidiary of Mitsui & Co. Ltd., whereby Mitsui acquired 20 percent of the licence covering Blocks 3 and 4. The purchase price amounted to MUSD 20 in cash, which Tethys received upon completion of the deal after the reporting period. In addition Mitsui undertook to fund Tethys' share of capital expenditures up to MUSD 60 on the Blocks effectively from January 1st 2010
• The Saiwan East–3 well tested 10,714 barrels of oil per day
• Independent third party resource audit over Blocks 3 and 4 gives an on Block contingent resource of 42 million barrels of conventional oil
• Saiwan East-4 successfully drilled – encounters several oil bearing layers
• Farha South Early Production System commences pilot production from Farha South-3 well
• Tethys Oil has in early July, after the reporting period, received TSEK 47,326 from 2,057,653 exercised warrants. Total number of shares in Tethys Oil after the dilution from the exercise of warrants amounts to 32,504,489 shares
• As at 30 June 2010 there have been no sales of oil and gas in Tethys Oil, nor for the equivalent period of last year
• Result for the first half year of 2010 amounted to TSEK 8,333 (TSEK -28,172 for the corresponding period last year) and TSEK 15,017 (TSEK -29,740) for the second quarter
• Earnings per share amounted to SEK 0.28 (SEK -1.13) for the first half of 2010 and SEK 0.50 (SEK -1.17) for the second quarter
• Cash and cash equivalents as per 30 June 2010 amounted to TSEK 3,604 (TSEK 13,620). As per reporting date, 20 August 2010, cash and cash equivalents amount to MSEK 220 following from the completion of the farmout of Blocks 3 and 4. Oil and gas investments amounted to TSEK 42,695 (TSEK 51,982) mainly related to Oman, Blocks 3 and 4

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