Tethys Petroleum today announced its third quarter 2012 financial
results. The results are highlighted by a 46% increase in
production revenues over the third quarter of last year.
RECENT FINANCIAL HIGHLIGHTS
Q3 2012 vs Q3 2011
-- Total Oil and Gas Revenue up 46% at USD10.0 million
-- Average oil production from the Doris field, Kazakhstan up 74% at 2,732
bopd
-- Administrative costs down 8% at USD4.5 million
-- Total Assets USD252.1 million
9 months 2012 vs 9 months 2011
-- Total Oil and Gas Revenue up 72% at USD26.7 million
-- Average oil production from the Doris field, Kazakhstan up 145% at 2,234
bopd
-- Administrative costs down 2% at USD15.5 million
The 9 months period in 2012 has seen a substantial increase in
oil production and revenue from the Doris oil field in Kazakhstan
with a small drop in corporate administrative costs over the same
period. It is forecast that both these trends will continue into 4Q
2012. On the revenue side both October's and November's average oil
production figures have so far contributed toward the best quarter
of oil production in Kazakhstan to date. October oil production
averaged approximately 3,700 bopd and it is forecast that
Novembers' production figures will exceed this number. These
figures demonstrate the optimisation of the trucking operation in
Kazakhstan is coming to fruition which has been the main
restriction on maximum production to date, not the production
capability of the wells.
On the costs side in Q3 the Company has initiated a review of
all costs with a particular focus on administrative expenses. The
objective of this exercise is first and foremost to review all
areas with a view to reducing costs but particularly administrative
costs, and secondly to review the categorization of costs to ensure
that the Company is reporting consistently with other similar oil
and gas companies, which will facilitate appropriate comparison
within its peer group.
Some of these measures can be seen in a 22% reduction in the Q3
2012 costs over the Q2 2012 costs and in the 8% reduction against
Q3 2011, but it is expected most of the effect will be realised in
the quarters to come as this assessment and resulting action takes
some time to implement. This cost reduction exercise does not in
anyway reflect the growth prospects of the Company which, as can be
seen from the higher production and revenue growth in Kazakhstan
and the recent signing of the MOU for a Tajikistan farm-in partner,
are very good.
The Company reports financial results in accordance with
International Financial Reporting Standards ("IFRS").
These highlights along with other operational and financial
details will be further discussed in a scheduled conference call.
Details of the conference call can be found below:
Conference Call:
A conference call will be held at 10:30 AM EST US and Canada and
15:30 PM GMT European time on Thursday, November 15, 2012. The
North American conference call number is ((866) 202-3048) and the
outside North America conference call number is (+1 (617)
213-8843). The conference call code to use is (32537707). Please
call in about 10 minutes before the starting time in order to be
patched into the call.
Webcast:
The call is being webcast and can be accessed at:
http://phoenix.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=213714&eventID=4869022.
The following disclosure is provided to comply with regulatory
requirements:
During the fourth quarter of 2011 and the first quarter of 2012,
the Company borrowed from various lenders an aggregate principal
amount of USD10 million for the purpose of re-financing the
purchase price of drilling rigs. The loans are evidenced by loan
notes having a maturity of one year or two years. The lenders also
received warrants to purchase ordinary shares of the Company having
a term of one year or two years, corresponding to the term of the
loan notes. In October 2012, the Company received approval from a
number of lenders to a one-year extension of the maturity date of
loans notes in the principal amount of USD2,165,240 maturing in
December 2012. In connection with the approval of the extension of
the maturity date, the Company agreed, subject to definitive lender
approval, to extend by six months the expiry date of 1,575,000
warrants issued in December 2011 (having an exercise price of
CAD0.58 to CAD0.65) and 3,017,380 warrants issued in February,
March and April 2012 (having an exercise price of CAD0.84 to
CAD1.18), excluding warrants issued to insiders of the Company. The
number of ordinary shares into which these warrants may be
exercised represents, in aggregate, 1.6% of the number of ordinary
shares outstanding on the date hereof. The exercise prices of these
warrants represent a premium of 14% to 27% in the case of the
warrants issued in December 2011 and 64% to 131% in the case of the
warrants issued in February, March and April 2012 of the volume
weighted average trading price of the ordinary shares of the
Company on the TSX for the five days to October 19, 2012, being the
date of the agreement with the lenders. The change to the expiry
dates of these warrants will be effective on November 29, 2012. The
Company will also issue, subject to definitive lender approval,
1,082,620 warrants having an exercise price of $0.64 to lenders who
agreed to extend the maturity date of their one year loan notes by
12 months. These warrants will expire on certain dates in December
2013 or, in the case of 307,620 warrants issued to two officers of
the Company, June 2014. The number of ordinary shares into which
these new warrants may be exercised represents, in aggregate, 0.4%
of the number of ordinary shares outstanding on the date hereof
(0.1% in respect of the warrants to be issued to the two officers
of the Company). The exercise price of the new warrants represents
a premium of 25% of the volume weighted average trading price of
the ordinary shares of the Company for the five days to October 19,
2012.
Tethys is focused on oil and gas exploration and production
activities in Central Asia with activities currently in the
Republics of Kazakhstan, Tajikistan 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, 2011 for a description of
risks and uncertainties relevant to our business, including our
exploration activities. A barrel of oil equivalent ("boe")
conversion ratio of 6,000 cubic feet (169.9 cubic metres) of
natural gas = 1 barrel of oil has been used and is based on the
standard energy equivalency conversion method primarily applicable
at the burner tip and does not represent a value equivalency at the
wellhead.
Tethys Petroleum Limited
Condensed Consolidated Statement of Financial Position
(Unaudited)
(in US Dollars)
As at
September 30, December 31,
2012 2011
$'000 $'000
Non-current assets
Property, plant and equipment 121,894 128,918
Intangible assets 104,165 99,959
Restricted cash 1,406 1,407
Prepayments and other receivables 10,629 10,217
Investment in jointly controlled entity 1,118 1,113
------------------------------
239,212 241,614
------------------------------
Current assets
Inventories 1,934 2,025
Trade and other receivables 7,449 5,478
Loan receivable from jointly controlled entity 1,868 2,013
Cash and cash equivalents 1,146 10,746
Restricted cash 474 885
Derivative financial instruments - interest
rate swap - 630
------------------------------
12,871 21,777
------------------------------
Total assets 252,083 263,391
------------------------------
------------------------------
Equity attributable to shareholders
Share capital 28,671 28,669
Share premium 306,725 306,725
Other reserves 41,200 38,530
Accumulated deficit (161,527) (144,962)
Non-controlling interest 8,648 8,918
------------------------------
Total equity 223,717 237,880
------------------------------
Non-current liabilities
Financial liabilities - borrowings 5,874 1,632
Deferred taxation 2,913 2,111
Trade and other payables 402 547
Asset retirement obligations 248 386
------------------------------
9,437 4,676
------------------------------
Current liabilities
Financial liabilities - borrowings 7,411 8,396
Derivative financial instruments - warrants 688 264
Derivative financial instruments - foreign
currency hedge - 157
Deferred revenue 1,238 1,839
Trade and other payables 9,294 10,179
Current tax 298 -
------------------------------
18,929 20,835
------------------------------
Total liabilities
------------------------------
28,366 25,511
------------------------------
Total shareholders' equity and liabilities
252,083 263,391
------------------------------
------------------------------
Tethys Petroleum Limited
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
For the three and nine months ended September 30, 2012
(in US Dollars)
For the 3 months For the 9 months
ended ended
September 30, September 30,
2012 2011 2012 2011
$'000 $'000 $'000 $'000
Sales and other revenues 9,990 6,849 26,681 15,506
Other operating income - 922 - 6,628
----------------------------------------
Total revenue and other income 9,990 7,771 26,681 22,134
Production expenses (3,562) (3,393) (9,401) (6,918)
Depreciation, depletion and
amortisation (4,766) (3,857) (12,557) (9,684)
Exploration and evaluation
expenditure written off (138) (1,807) (138) (1,807)
Listing expenses - (273) - (606)
Business development expenses (42) (697) (621) (1,926)
Administrative expenses (4,490) (4,859) (15,248) (15,520)
Share based payments (582) (1,054) (2,459) (3,111)
Foreign exchange (loss) / gain - net (158) (183) (334) 33
Fair value loss on derivative
financial instrument (149) (231) (216) (554)
Loss from jointly controlled entity (395) (291) (294) (802)
Net finance (costs) / income (296) 194 (1,148) 912
----------------------------------------
Loss before taxation (4,588) (8,680) (15,735) (17,849)
Taxation (529) 105 (1,100) 283
----------------------------------------
Loss for the period (5,117) (8,575) (16,835) (17,566)
----------------------------------------
----------------------------------------
Loss attributable to:
Shareholders (4,906) (8,575) (16,565) (17,566)
Non-controlling interest (211) - (270) -
----------------------------------------
Loss for the period (5,117) (8,575) (16,835) (17,566)
----------------------------------------
----------------------------------------
Loss per share attributable to
shareholders
Basic and diluted (0.02) (0.03) (0.06) (0.07)
Tethys Petroleum Limited
Condensed Consolidated Statement of Cash Flows
(Unaudited)
For the three and nine months ended September 30, 2012
(in US dollars)
For the 3 months For the 9 months
ended ended
September 30, September 30,
2012 2011 2012 2011
$'000 $'000 $'000 $'000
Cash flow from operating activities
Loss before taxation for the period (4,588) (8,680) (15,735) (17,849)
Adjustments for
Share based payments 582 1,054 2,459 3,111
Net finance cost / (income) 296 (194) 1,148 (910)
Unsuccessful exploration and
evaluation expenditure written
off - 1,807 - 1,807
Depreciation, depletion and
amortization 4,766 3,857 12,557 9,684
(Gain)/loss on disposal of assets - (16) - 120
Fair value loss on derivative
financial instrument 149 231 216 554
Net unrealised foreign exchange
(gain) / loss 228 (70) 216 (22)
Loss from jointly controlled
entity 395 291 294 802
Deferred revenue (157) 1,721 (601) (55)
Other operating income - (922) - (6,628)
Net change in non-cash working
capital 84 (1,252) (1,903) (483)
----------------------------------------
Net cash generated / (used) in
operating activities 1,755 (2,173) (1,349) (9,869)
----------------------------------------
Cash flow from investing activities
Interest received - 36 5 112
Expenditure on exploration and
evaluation assets (2,412) (3,335) (4,014) (9,624)
Expenditures on property, plant and
equipment (3,609) (7,813) (5,317) (27,210)
Movement in restricted cash 1 2,100 412 (1,451)
Investment in jointly controlled
entity - - (5) -
Payments made on behalf of jointly
controlled entity - (5,071) (12,435)
Movement in advances to construction
contractors (643) 1,304 (1,677) 1,187
Movement in value added tax
receivable 251 (980) 1,098 (3,133)
Net change in non-cash working
capital 1,476 726 (924) 1,080
----------------------------------------
Net cash used in investing
activities (4,936) (13,033) (10,422) (51,474)
----------------------------------------
Cash flow from financing activities
Proceeds from issuance of
borrowings, net of issue costs 999 - 10,334 -
Repayment of borrowings (246) (93) (7,112) (269)
Interest paid on borrowings (283) (69) (804) (266)
Movement in other non-current
liabilities (71) (76) (213) (227)
----------------------------------------
Net cash generated / (used) in
financing activities 399 (238) 2,205 (762)
----------------------------------------
Effects of exchange rate changes on
cash and cash equivalents (44) 114 (34) (14)
Net decrease in cash and cash
equivalents (2,826) (15,330) (9,600) (62,119)
Cash and cash equivalents at
beginning of the period 3,972 32,346 10,746 79,135
----------------------------------------
Cash and cash equivalents at end of
the period 1,146 17,016 1,146 17,016
----------------------------------------
Contacts: North America Tethys Petroleum Limited Sabin Rossi,
Vice President Investor Relations Office: +1 416-941-1257 +1
416-947-0167 (FAX) Europe Tethys Petroleum Limited Veronica
Zhuvaghena, Vice President Corporate Communications Office: +44
1481 725911 +44 1481 725922 (FAX) Corporate Brokers: FirstEnergy
Hugh Sanderson/David Van Erp Office: + 44 207 448 0200 Seymour
Pierce Richard Redmayne/Jonathan Wright/Stewart Dickson Office: +44
207 107 8000 Asia Pacific: Quam IR Anita Wan Office phone/fax: +852
2217 2999 FTI Consulting Ben Brewerton/Edward Westropp Office: +44
207 831 3113 Tethys Petroleum Limitedinfo@tethyspetroleum.com
www.tethyspetroleum.comhttp://m.tethyspetroleum.com