Third Quarter 2009 Financial Results

November 16, 2009

ST. PETER PORT, GUERNSEY, Nov 16, 2009 (MARKETWIRE via COMTEX) — Tethys Petroleum Limited (“Tethys” or the “Company”) (TSX: TPL) today announced its third quarter 2009 financial results. The results are underlined by a 60% increase in revenues over the third quarter of last year.

The Company reports financial results in accordance with International Financial Reporting Standards (“IFRS”).

HIGHLIGHTS

- Production revenues for the quarter from Kazakhstan and Uzbekistan totaled some US$2.426 million compared to US$1.484 million for the same period in 2008.

- Capital expenditure in the three months to September 30, 2009 was US$8.337 million compared to US$14.152 million in the same period of 2008. Capital expenditure for the period focused operationally on:

-- Drilling of the "deep" exploration well AKD01 at Akkulka, Kazakhstan

-- Drilling of the new East Komsomolsk well KOM200 in Tajikistan

-- Drilling of exploration well EOL 09 at East Olimtai in Tajikistan

-- Tajik seismic data processing

-- Workovers on wells in Uzbekistan

- A net loss of $3.944 million was recorded in the three months to September 30, 2009, compared to $4.964 million in the three months to September 30, 2008. As at September 30, 2009 in Uzbekistan products valued at $815,000 were stored in inventory. This stock is being held in inventory for a batch sale, which should realise a better price and had this stock been sold the net loss would have been significantly reduced.

- Operating costs for Q3 2009 were US$0.748 million compared to US$0.275 million for the same period in 2008 primarily as a result of commencing oil production in Uzbekistan.

- G & A costs in the three months to September 30, 2009 were US$3.268 million compared to US$3.429 million the same period of 2008.

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.

See our Annual Information Form for the year ended December 31, 2008 and other filings for a description of risks and uncertainties relevant to our business including our exploration and development activities.

Tethys Petroleum Limited Interim Consolidated Statement of Financial Position (Unaudited) As at September 30, 2009 and December 31, 2008 --------------------------------------------------------------------------- (in thousands of US dollars) September December 31, January 1, Note 30, 2009 2008 2008 $ $ (see note 24) $ Assets Non-current assets Intangible assets 10 27,836 11,688 7,335 Property, plant and equipment 11 78,252 69,839 38,327 Investments 12 614 587 318 Other receivables 13 4,504 6,357 5,814 --------------------------------------- 111,206 88,471 51,794 --------------------------------------- Current assets Inventories 815 213 - Trade and other receivables 13 3,895 2,664 1,360 Cash and cash equivalents 14 8,711 22,200 26,692 --------------------------------------- 13,421 25,077 28,052 --------------------------------------- Total assets 124,627 113,548 79,846 --------------------------------------- --------------------------------------- Equity and Liabilities Equity attributable to shareholders Share capital 18 13,455 6,639 4,511 Share premium 18 153,795 138,598 94,972 Other reserves 27,535 25,147 20,728 Accumulated deficit (82,208) (66,654) (44,470) --------------------------------------- 112,577 103,730 75,741 --------------------------------------- Liabilities Non-current liabilities Financial liabilities - borrowings 15 4,356 5,096 - Other non-current payables 16 436 523 776 Provisions for other liabilities and charges 17 206 465 1,050 --------------------------------------- 4,998 6,084 1,826 --------------------------------------- Current liabilities Financial liabilities - borrowings 15 1,301 853 - Financial liabilities - warrants 15 788 146 - Trade and other payables 16 4,963 2,735 2,279 --------------------------------------- 7,052 3,734 2,279 --------------------------------------- Total liabilities 12,050 9,818 4,105 Total shareholders' equity and liabilities 124,627 113,548 79,846 --------------------------------------- --------------------------------------- Commitments and contingencies 23 Tethys Petroleum Limited Interim Consolidated Statement of Comprehensive Loss (Unaudited) For the nine months ended September 30, 2009 --------------------------------------------------------------------------- (in thousands of US dollars) Three months ended Nine months ended September 30, September 30, Note 2009 2008 2009 2008 $ $ $ $ Sales and other operating revenues 5 2,426 1,484 5,752 4,482 Production expenditures (748) (275) (1,989) (537) Depreciation, depletion and amortization (1,120) (1,254) (3,035) (3,608) Exploration and evaluation expenditure written off (14) (67) (140) (341) Fair value gains (loss) on derivative financial instrument (160) 517 (221) 658 Administrative expenses 6 (4,191) (4,159) (12,342) (13,277) -------------------------------------- Operating loss (3,807) (3,754) (11,975) (12,623) Foreign exchange gains (loss) net 147 (1,254) (2,275) (1,391) Finance income - 202 49 626 Finance costs (284) (158) (1,353) (1,210) -------------------------------------- Loss before tax (3,944) (4,964) (15,554) (14,598) Taxation 8 - - - - -------------------------------------- Total comprehensive loss for the period attributable to shareholders (3,944) (4,964) (15,554) (14,598) -------------------------------------- -------------------------------------- Loss per share Basic and diluted 9 (0.03) (0.07) (0.16) (0.27) -------------------------------------- -------------------------------------- No dividends were paid or are declared for the period (2008 - $Nil). All operations were continuing throughout both periods. Attributable to shareholders Accu- Option Share Share mulated re- Warrant Total Note capital premium deficit serves reserves equity $ $ $ $ $ $ At January 1, 2008 18 4,511 94,972 (44,470) 4,173 16,555 75,741 Loss for the period - - (14,598) - - (14,598) Issue of share capital 18 2,128 47,872 - - - 50,000 Cost of share issue - (3,928) - - - (3,928) Share-based payments - value of employee service - - - 3,655 - 3,655 Tethys Petroleum Limited Interim Consolidated Statement of Cash Flows (Unaudited) For the three and nine months ended September 30, 2009 --------------------------------------------------------------------------- (in thousands of US dollars) Three months Nine months ended ended September 30, September 30, Note 2009 2008 2009 2008 $ $ $ $Cash flow from operating activities Loss before income tax for the period (3,944) (4,964) (15,554) (14,598) Adjustments for Share based payments 7 768 730 2,388 3,655 Net finance cost (income) 284 (44) 1,305 584 Unsuccessful exploration and evaluation 10 expenditures 14 67 140 341 Depreciation, depletion and amortization 11 1,120 1,254 3,035 3,608 Fair value gain (losses) on derivative financial instrument 160 (517) 221 (658) Net unrealised foreign exchange loss (7) (33) 1,200 - Increase (decrease) in working capital 22 (1,199) (1,551) (1,028) (1,929) ---------------------------------- Cash used in operations (2,732) (5,058) (8,293) (8,997) Interest received - 335 49 626 ---------------------------------- Net cash used in operating activities (2,768) (4,723) (8,244) (8,371) ---------------------------------- Cash flow from investing activities Expenditure on exploration and evaluation assets (4,530) (1,734) (13,537) (3,432) Expenditures on property, plant and equipment (3,807) (12,418) (9,816) (23,825) Acquisition of subsidiary, net of cash received 19 - - 532 - Investment in restricted cash (7) (26) (27) (151) Movement in advances to construction contractors 126 (1,625) 1,280 (3,692) Value added tax receivable (350) (994) (395) (998) ---------------------------------- Net cash used in investing activities (8,568) (16,797) (21,963) (32,098) ---------------------------------- Cash flow from financing activities Proceeds from short-term borrowings 15 - - 2,500 5,300 Repayment of short-term borrowings - - (2,500) - Repayment of long-term borrowings 15 (230) (192) (594) (378) Interest paid on long-term borrowings and other non current payables (182) - (574) - Other non-current liabilities 16 (22) (24) (65) (228) Proceeds issuance of ordinary share 18 - - 20,000 50,000 Costs of issuance of ordinary shares 18 (68) (178) (2,049) (3,928) ---------------------------------- Net cash from/(used) in financing activities (502) (394) 16,718 50,766 ---------------------------------- Effects of exchange on the balance of cash held in a foreign currency (36) - - - ---------------------------------- Net increase/(decrease) in cash and cash equivalents (11,838) (21,914) (13,489) 10,297 Cash and cash equivalents at beginning of the period 20,549 58,903 22,200 26,692 ---------------------------------- Cash and cash equivalents at end of the period 8,711 36,989 8,711 36,989 ---------------------------------- Tethys Petroleum Limited Notes to Interim Consolidated Financial Statements For the period ended September 30, 2009 (tabular amounts in thousands of US dollars)

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

In Kazakhstan
PG Communications
Ardak Akanov – Managing Director
Office phone/fax: +7 (727) 272 8867, +7 (727) 272 8237,
+7 (727) 272 7745
development@pressclub.kz

In Asia-Pacific
Quam IR
Anita Wan
Associate Director
Office phone/fax: + (852) 2217-2999
anita.wan@quamgroup.com

SOURCE: Tethys Petroleum Limited

mailto:info@tethyspetroleum.com
http://www.tethyspetroleum.com
mailto:development@pressclub.kz
mailto:anita.wan@quamgroup.com