Operational Update

March 21, 2011


Tethys Petroleum Limited (“Tethys” or the “Company” (TSX: TPL) today provided an operational update in conjunction with its financial results for the year ended December 31, 2010.

Operational Update – Kazakhstan, Tajikistan and Uzbekistan

RECENT HIGHLIGHTS Kazakhstan — 3D seismic survey interpretation complete around Doris oil discovery. — Drilling operations commenced on AKD04 and AKD05 will spud imminently, these are the first appraisal wells of the Doris oil discovery to be drilled based on the new 3D seismic. — AKD03 (Dione) exploration well comprehensive testing program commenced in March 2011. — KBD01 (Kalypso) exploration well re-commenced drilling in February 2011 upon arrival of the Telesto rig. — AKD02 and G6RE to be tested with radial drilling technology. — Joint-venture signed to construct oil rail loading terminal. — Stage 2 oil production facilities currently being installed with 3,000 to 4,000 bopd target end June 2011. Tajikistan — 690 km seismic data acquisition complete. — Aerial magnetic and gravity survey to commence imminently. — Testing of the KOM201 continues using radial drilling with results expected in Q2 2011. — East Olimtoi exploration well EOL09 drilling to re-commence imminently with target depth planned for end Q2 2011. — New exploration well planned. Uzbekistan — NUR96 well tested at over 1,100 bopd. — Jet pumping unit being mobilised to optimise production with results expected Q2 2011. Kazakhstan

The appraisal programme on the Doris oil discovery and further exploration on the Akkulka block is continuing.

In November 2010, both the 3D and 2D seismic acquisition programs on the Doris oil discovery and surrounding exploration area had been completed and first data has been interpreted. As well as providing more detailed information on the discovered field, the seismic program has identified several new exploration targets at various depths in the vicinity.

The AKD04 and AKD05 appraisal wells locations were identified in January 2011 based upon the mapping of the 3D seismic and incorporating results from the pressure transient analysis of the testing on the Cretaceous horizon in AKD01. The AKD04 (“Dero”) exploration / appraisal well has commenced drilling and is located to the east of the Doris crest in order to test the likely continuation of the structure in that area, and AKD05, which will spud within the next two weeks, is being drilled immediately up-dip of the AKD01 well with both wells targeting the lower Cretaceous Aptian sandstones and Jurassic carbonates that were successfully tested in AKD01, as well as a possible third, overlying, Albian sandstone horizon.

The AKD03 (“Dione”) exploration well, which is located approximately 10 km to the southwest of the AKD01 Doris discovery well (on a separate prospect), reached its targeted depth at 3,975 m in January 2011. A comprehensive testing programme commenced in late February 2011 following receipt of necessary approvals from the Kazakh State. A sandstone interval within the upper part of the Jurassic, which was not present in AKD01, had good oil indications while drilling and will be tested in the short term. The overlying Jurassic carbonate zone (which is similar to AKD01 but may have lower reservoir quality) is over 20 m in thickness and which had hydrocarbon indications while drilling and on the wireline logs will then be tested. A further potential oil bearing zone has been identified in good quality Cretaceous, Albian age sandstones, these appearing similar in quality to the reservoir in the Doris discovery well and testing of this zone will follow. Results of the testing programme are expected at the end of April 2011.

The KBD01 (“Kalypso”) exploration well is located approximately 50 km to the northwest of the Doris oil discovery and has a planned total depth of over 4,000 m. The drilling of the KBD01 well continued in February 2011 upon arrival of the Telesto rig from AKD03 and is at a current depth of 1,034 m. This well is targeting potential reservoirs at several stratigraphic levels from the Cretaceous to the Permo-Carboniferous and the Company believes that this prospect has significant potential. The KBD01 well is the first deep exploration well to be drilled by the Company on the Kul-Bas Block, which also contains several other attractive prospects.

Both the AKD02 appraisal well and the G6RE sidetrack well await testing with the application of radial drilling to simulate the Upper Jurassic carbonate zone, which is forecast to be in Q2 2011. Once the results of radial drilling are known and evaluated then a decision as to the viability of acid hydro-fracing these zones will be taken. Radial drilling has been successfully applied in the Jurassic carbonate reservoir on the Company’s North Urtabulak field in Uzbekistan.

In January 2011 the Company received Kazakh State approval for the Pilot Production Project for the Doris oil discovery in the Akkulka Block. This approval gives the right to produce oil from the Akkulka Field during the exploration period and allows the Company to install and operate production facilities for the planned 3,000 to 4,000 bopd (Phase 2) production target for the end of Q2 2011. In order to advance this project, on February 17, 2011, the Company signed a joint venture agreement to construct and operate a rail oil loading terminal. It is intended that this terminal will take crude oil from the Pilot Production Project and will be owned 50/50 with a new local partner, Eurasia Gas Group LLP, who have strong experience in the oil distribution business in Kazakhstan.


The Company’s regional seismic acquisition programme has been completed with 693 Km of data being acquired and processing and interpretation continues, these data being primarily aimed at identifying further exploration potential. Based on these data the Company is planning to drill a new exploration well to a depth of up to 3,000 m using its ZJ30 rig Tykhe. This well is expected to commence operations in Q2 2011.

A contract has been signed for a gravity gradiometry and magnetic aerial survey to cover the entire area of the 35,000 km(2)Bokhtar Production Sharing Contract Area and a team is being mobilised to commence this survey once final governmental approvals have been obtained – these being expected shortly. This survey will provide additional and more aerially extensive data to complement the existing seismic acquisition. This survey is expected to take place in Q2 2011 with results expected in Q3 2011. The Company has previously stated that it is seeking a suitable farm-in partner for its exploration programme in Tajikistan and these geophysical data are an important part of the information relating to such a potential farm-in. Discussions with several parties are ongoing.

The KOM201 well which lies adjacent to Dushanbe reached a total measured depth of 2,456 metres in November 2010 in what is interpreted to be the Triassic sequence. The well commenced cased-hole testing in January 2011 and will shortly have radial drilling applied with results expected in the first half of 2011. Wireline logs indicate hydrocarbons may be present in the secondary, overlying targets of the Cenomanian, Hauterivian and Bukhara.

The East Olimtoi exploration well EOL09 is targeting an attractive prospect on the edge of a salt induced structure some 40 km south-west of the city of Kulob. Operations on the well recommenced in September 2010 and it is currently at a depth of 2,900 m targeting a Palaeogene reservoir prognosed at a depth of 3,800 m. Drilling is about to recommence after a significant rig upgrade and the well is expected to reach target depth at the end of Q2 2011.


The NUR96H2 horizontal development well at the North Urtabulak field in Uzbekistan recently tested at over 1,100 bopd and has now been put on production. This well reached a total depth of 3,060 m with a producing section of 437 m of inclined and horizontal hole.

Recently the Company has started the process to import jet-pumping equipment in order to evaluate its suitability to the Jurassic carbonate reservoirs present in Uzbekistan and optimise production at North Urtabulak, results are expected in the June 2011.

Tethys continues to carry out production enhancement techniques on North Urtabulak including radial drilling, water injection, and the drilling of new wells, to capitalise on the relatively high world oil prices and increasing short-term cash flow through increasing production.

In addition to the work on their current asset Tethys is also pursuing obtaining other projects including other nearby existing fields and also exploration acreage, which it believes it is in a strong position to achieve due to the successful work it is carrying out at North Urtabulak.

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Tajikistan, Kazakhstan 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, 2009 for a description of risks and uncertainties relevant to our business, including our exploration activities. Hydrocarbon indications from drilling or wireline log data from intervals in a well are not definitive and there is no guarantee that such intervals will flow commercial quantities of hydrocarbons, or indeed flow any hydrocarbons to surface.

Contacts: Tethys Petroleum Limited Sabin Rossi Vice President Investor Relations +1 416 572 2065 +1 416 572 2201 (FAX) info@tethyspetroleum.com www.tethyspetroleum.com Tethys Petroleum Limited TD Canada Trust Tower 161 Bay Street, 27th Floor Toronto N5J 2S1, Canada Mobile site: http://m.tethyspetroleum.com In Asia-Pacific: Quam IR Anita Wan Associate Director + (852) 2217-2999 + (852) 2217-2999 (FAX) anita.wan@quamgroup.com
SOURCE: Tethys Petroleum Limited

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