GRAND CAYMAN, CAYMAN ISLANDS -- (Marketwired) -- 11/14/14 -- Tethys Petroleum Limited ("Tethys" or the "Company") (TSX: TPL)(LSE: TPL) today announced its Third Quarter 2014 Financial Results and activity update.
Financial Highlights
-- Loss for the period from continuing operations USD2.4 million (Q3: 2013
USD4.9 million), a decrease of 51%
-- Basic & diluted loss per share of USD0.01 cent from continuing
operations (Q3: 2013 USD0.02 cents)
-- Oil & gas revenue from continuing operations of USD7.3 million (Q3 2013:
USD9.1 million)
-- Production expenses reduced by 3% to USD3.0 million (Q3 2013: USD3.1
million)
-- Administrative expenses reduced by 12% to USD4.2 million (Q3 2013:
USD4.8 million)
-- Business development expenses reduced by 16% to USD0.5 million (Q3 2013:
USD0.6 million)
-- Capital expenditure of USD6.2 million (Q3 2013: USD4.9 million)
-- Cash & cash equivalents at the end of Q3 2014 of USD 10.1 million
including cash held in a disposal group (Q3: 2013 USD51.2 million)
Denise Lay, Director and Chief Financial Officer of Tethys, commented; "Q3 has seen consistency of production over Q2 and reductions in operating, business development and G&A costs. Cost reduction is a key focus for the Company and a comprehensive plan of cost reductions, which will be phased, has already commenced, the results of which will be realised over the coming months. This, combined with an anticipated step change in revenue when we bring on stream additional gas production in Q1 2015, should be reflected in the bottom line results in Q1 and Q2 of 2015."
Operations Highlights
Kazakhstan
Shallow Gas Program Update
All the key items within the next phase of the gas development program are on track and it is expected that the additional production will be ready to be brought on stream in January 2015. This includes the installation of a gas dehydration unit and construction of shallow gas tie-ins for the new gas wells to hook up the previously drilled gas wells.
When this next phase of the gas development programme is brought on stream it is anticipated that this will realise an approximately three-fold increase in gas production. Negotiations continue for a new gas sales contract which the Company expects to sign before year end, and with a significantly higher sales price than the current contract.
SinoHan Transaction Update
In October 2015 Tethys announced that it had agreed with SinoHan Oil and Gas Investment 6 B.V. ("SinoHan"), part of HanHong, a Beijing, PRC based private equity fund, to extend the one-year longstop date for completing the sale by a period of six months, until 1 May 2015. This extension keeps the current agreement in place while discussions continue with the Kazakh State.
This deal is based upon USD75 million for the 50% (+ 1 share) interest.
Once this transaction has completed the new partnership can then move forward quickly to further develop the shallow gas resource where the Company has identified a number of new attractive prospects, drill a horizontal well on the Doris field to increase production, and also move ahead with drilling the exciting deeper Klymene exploration prospect.
Tajikistan
The seismic acquisition programme planned to identify the location of the first deep well to be drilled commenced in the third quarter. This new wide line 2D survey is specially designed to image the deep targets described in the Independent Resource Report and consists of a first phase of 826 kms with an option for an additional 200 kms, all to be acquired within 2014 and the first three quarters of 2015. As well as 2D acquisition and processing, a concurrent low cost passive seismic survey is planned and a Magnetotellurics survey is also being acquired now along the dip lines.
Processing of data from the survey will be concurrent so interpretation and mapping will be underway before the end of this year. This data set will assist in the identification of the best possible location to spud the first deep well by the end of 2015.
The partnership of Tethys, Total and CNPC, together as Bokhtar Operating Company, are looking forward to the results of this survey with all partners keen to move forward with the drilling of the first deep well on this very prospective acreage.
The full Quarterly Results together with Management's Discussion and Analysis have been filed with the Canadian securities regulatory authorities. Copies of the filed documents may be obtained via SEDAR at www.sedar.com or on Tethys' website at www.tethyspetroleum.com. The summary financial statements are attached to this press release. Investors are advised to review the Third Quarterly 2014 financial statements and the notes to those financial statements in detail as they contain important information.
The Company's Third Quarter 2014 financial statements are prepared under International Financial Reporting Standards ("IFRS").
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.
This press release contains "forward-looking information." Such forward-looking statements reflect our current views with respect to future events and are subject to certain assumptions. See our Annual Information Form for the year ended December 31, 2013 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.
Tethys Petroleum Limited
Condensed Consolidated Statement of Financial Position (unaudited)
(in thousands of US dollars)
As at
----------------------------------------
September 30, 2014 December 31, 2013
Non-current assets
Deferred tax 301 322
Intangible assets 45,119 31,074
Property, plant and equipment 14,687 15,291
Restricted cash 651 660
Investment in jointly controlled
entity 4 4
60,762 47,351
Current assets
Trade and other receivables 660 1,358
Advances - 4,000
Cash and cash equivalents 7,914 25,109
Restricted cash 583 475
Assets of a disposal group
classified as held for sale 171,140 156,325
180,297 187,267
Total assets 241,059 234,618
Equity
Share capital 33,645 28,756
Share premium 321,724 307,295
Other reserves 42,837 42,621
Accumulated deficit (193,378) (182,533)
Non-controlling interest 6,158 6,454
Total equity 210,986 202,593
Non-current liabilities
Financial liabilities - borrowings 5,923 -
5,923 -
Current liabilities
Financial liabilities - borrowings 5,109 4,965
Derivative financial instruments -
warrants - 17
Current taxation 172 144
Trade and other payables 2,642 4,946
Provisions - 520
Liabilities of a disposal group
classified as held for sale 16,227 21,433
24,150 32,025
Total liabilities 30,073 32,025
Total equity and liabilities 241,059 234,618
Tethys Petroleum Limited
Condensed Consolidated Statement of Comprehensive Income (unaudited)
(in thousands of US dollars)
Three months ended Nine months ended
------------------------------------------------
September September
September 30, 2013 September 30, 2013
30, 2014 Restated 30, 2014 Restated
Sales and other revenues 7,261 9,082 21,165 28,418
Sales expenses (534) (831) (1,776) (2,356)
Production expenses (2,963) (3,137) (9,975) (9,380)
Depreciation, depletion and
amortization (281) (3,581) (580) (11,350)
Business development
expenses (461) (628) (1,781) (1,605)
Administrative expenses (4,181) (4,848) (14,388) (14,046)
Transaction costs of assets
held for sale (114) - (245) -
Share based payments (20) (205) (216) (751)
(Loss)/gain on Tajik farm-
out - (206) - 8,453
Foreign exchange loss - net (98) (140) (168) (67)
Fair value gain on
derivative financial
instrument - net - 516 17 548
(Loss)/profit from jointly
controlled entity (44) 201 (1,312) 589
Finance costs - net (215) (732) (1,200) (2,249)
Loss before tax from
continuing operations (1,650) (4,509) (10,459) (3,796)
Taxation (712) (378) 20 (2,532)
Loss for the period from
continuing operations (2,362) (4,887) (10,439) (6,328)
Loss for the period from
discontinued operations net
of tax (57) (501) (702) (689)
Loss and total comprehensive
income for the period (2,419) (5,388) (11,141) (7,017)
Loss and total comprehensive
income attributable to:
Shareholders (2,321) (5,177) (10,845) (6,578)
Non-controlling interest (98) (211) (296) (439)
Loss and total comprehensive
income for the period (2,419) (5,388) (11,141) (7,017)
Loss per share attributable
to shareholders:
Basic and diluted - from
continuing operations (0.01) (0.02) (0.03) (0.02)
Basic and diluted - from
discontinued operations - - - -
Tethys Petroleum Limited
Condensed Consolidated Statement of Cash Flows (unaudited)
(in thousands of US dollars)
Three months ended Nine months ended
--------------------------------------------------------
September 30, September 30, September 30, September 30,
2014 2013 2014 2013
Cash flow from
operating
activities
Loss before tax from
continuing
operations (1,650) (4,509) (10,459) (3,796)
Loss before tax from
discontinued
operations (57) (551) (704) (681)
Adjustments for
Share based
payments 20 205 216 751
Net finance cost 215 734 1,200 2,249
Depreciation,
depletion and
amortization 281 3,721 580 12,234
Fair value gain on
derivative
financial
instruments - (516) (17) (548)
Net unrealised
foreign exchange
(gain)/loss (147) 113 (64) (2)
Loss/(gain) on
Tajik farm-out - 206 - (8,453)
Loss/(profit) from
jointly controlled
entity 44 (201) 1,312 (589)
Movement in
deferred revenue - (491) - (1,049)
Movement in
provisions (200) - (520) -
Net change in
working capital (613) (4,200) (1,161) (2,943)
Cash used in
operating
activities (2,107) (5,489) (9,617) (2,827)
Corporation tax
paid - (50) (148) (276)
Net cash used in
operating
activities (2,107) (5,539) (9,765) (3,103)
Cash flow from
investing
activities
Interest received 50 60 148 152
Expenditure on
exploration and
evaluation assets (1,633) (945) (6,199) (1,458)
Expenditure on
property, plant and
equipment (4,583) (4,040) (12,118) (5,841)
Movement in
restricted cash (14) (10) (474) (635)
Investment in
jointly controlled
entity - - - (4)
Repayment of loan
receivable from
jointly controlled
entity - - - 400
(Costs)/proceeds of
Tajik farm-out - (206) - 63,199
Movement in advances
to construction
contractors (304) (1,409) (2,032) (2,321)
Movement in value
added tax
receivable 72 189 (21) 1,734
Net change in
working capital (1,063) 704 (251) (1,387)
Net cash (used
in)/generated from
investing
activities (7,475) (5,657) (20,947) 53,839
Cash flow from
financing
activities
Proceeds from
issuance of
borrowings, net of
issue costs 3,884 - 11,604 4,714
Repayment of
borrowings (1,113) (1,216) (8,204) (4,203)
Interest paid on
borrowings (434) (631) (1,357) (1,814)
Proceeds from
issuance of equity - - 14,947 523
Share issue costs (133) - (1,379) -
Movement in asset
retirement
obligation - (253) - (253)
Payment of other
liabilities (27) (70) (126) (212)
Net cash generated
from/(used in)
financing
activities 2,177 (2,170) 15,485 (1,245)
Effects of exchange
rate changes on
cash and cash
equivalents (206) 38 (437) (34)
Net
(decrease)/increase
in cash and cash
equivalents (7,611) (13,328) (15,664) 49,457
Cash and cash
equivalents at
beginning of the
period 17,678 64,535 25,731 1,750
Cash and cash
equivalents at end
of the period 10,067 51,207 10,067 51,207
Cash and cash
equivalents at end
of the period
comprises:
Cash in assets of a
disposal group held
for sale 2,153 - 2,153 -
Cash and cash
equivalents 7,914 51,207 7,914 51,207
10,067 51,207 10,067 51,207
Contacts:
Tethys Investor Relations: Tethys Petroleum Limited
Sabin Rossi
Vice President Investor Relations
srossi@tethyspetroleum.com
Media / IR Enquiries
Asia Pacific
Quam IR:
Anita Wan
+852 2217 2999
info@tethyspetroleum.com
Web: www.tethyspetroleum.com
Twitter: www.twitter.com/tethyspetroleum
