Convertible Financing Update

May 22, 2015

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO US NEWSWIRE SERVICES OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.

Tethys Petroleum Limited ("Tethys" or the "Company") (TSX:TPL)(LSE:TPL) is pleased to announce that in addition to the recently announced US$7.5 million convertible debenture financing, it has entered into an agreement in respect of the issue and sale of an additional convertible debenture as described below.

Additional Convertible Loan Signed

--  Financing: Unsecured convertible loan facility
--  Principal: US$1.7 million
--  Term: 2 years
--  Interest rate: 9% p.a.
--  Conversion price: US$0.10
--  Lender: Annuity and Life Reassurance Ltd ("ALR")

The additional convertible debenture agreement has been entered into with ALR, an insurance company, the assets of which are managed by Pope Asset Management, LLC ("PAM"). ALR currently holds warrants to acquire 23,333,333
ordinary shares in Tethys, as detailed in the announcement by the Company on March 10, 2015. PAM currently controls the voting rights over approximately 19% of the shares in the Company. The transaction is on similar terms to the convertible debenture financing announced on May 15, 2015, and is subject to customary closing conditions.

Pursuant to the terms of the debenture, ALR will not be entitled to exercise any right of conversion that would result in the issuance of more than 10,320,980 new ordinary shares until such time as the approval of the
Company's disinterested shareholders has been obtained if and to the extent required under the rules of the TSX. In the event that the exercise of the conversion rights would result in ALR and its affiliates together with PAM exercising control or direction over 20% or more of the issued and outstanding ordinary shares of the Company, such exercise will be subject to approval of the shareholders of the Company excluding votes attached
to the shares over which ALR or its affiliates or PAM exercises control or direction.

The debenture is redeemable prior to maturity for an amount equal to the principal outstanding together with any accrued interest and an early redemption fee of 3.5% of the principal amount to be redeemed. The debenture contains event of default provisions, including as a result of the failure to obtain any required governmental approvals to the conversion of the debenture.

John Bell, Executive Chairman, said:

"We are very pleased to have now received all the funds on the US$7.5 million convertible with AGR Energy and, alongside this, to have secured additional funding and the support of Pope Asset Management, our largest
shareholder, as we continue to progress the strategic review."

Bill Wells, President of Pope Asset, said:

"We are pleased to have the opportunity to be able to participate on this placement. The investment by AGR Energy not only helps provide needed short-term capital but also provides a potential new in country partner
that may be of great strategic benefit to Tethys. We are hopeful an agreement can be reached that will help put Tethys on a path for success."

About Tethys

Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

Disclaimer

This press release contains "forward-looking information". Such forward-looking statements reflect our current views with respect to future events, including the satisfaction of customary closing conditions in respect of
the transaction, the receipt by the Company of US$1.7 million of funds, the receipt of any required governmental approval to the conversion of the debenture, AGR Energy becoming a partner of Tethys with such partnership providing great strategic benefits to Tethys, and that an agreement is reached that puts Tethys on a path to success. The forward looking statements are based on the following assumptions: that customary closing conditions will be satisfied in respect of the transaction in a timely manner, that the US$1.7 million of funds will be received, that any required governmental approvals to the conversion of the debenture will be
obtained in a timely manner, that AGR Energy becomes a partner of Tethys and such partnership provides great strategic benefits to Tethys, and that an agreement is reached that puts Tethys on a path to success. These forward looking statements are subject to a number of risks and uncertainties, including that customary closing conditions for the transaction are not satisfied in a timely manner or at all, that the US$1.7 million will not be received by the Company as anticipated and within expected timeframes, that any required governmental approvals to the conversion of the debenture are not obtained in a timely manner or at all, that AGR Energy does not become a partner of Tethys, and that no agreement is reached that puts Tethys on a path to success.
See also our Annual Information Form for the year ended December 31, 2014 for a description of risks and uncertainties relevant to our business, including our exploration activities. The "forward looking statements"
contained herein speak only as of the date of this press release and, unless required by applicable law, the Company undertakes no obligation to publicly update or revise such information, whether as a result of new
information, future events or otherwise.

FOR FURTHER INFORMATION PLEASE CONTACT:

CAMARCO (Financial PR)
Billy Clegg / Georgia Mann
+44 (0) 203 757 4983

OR

Tethys Petroleum Limited
info@tethyspetroleum.com
www.tethyspetroleum.com