TETHYS PETROLEUM LIMITED Snapshot
Tethys Petroleum Limited 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.
Strong reserves, production and cashflow
Current production in excess of 5,000 boepd, (60% gas, 40% oil) from 100% operating interest in shallow gas fields in Kazakhstan with plans to grow this in 2015
2P reserves of 27.08 MM boe and 1.3 billion barrels of prospective resources
World class acreage position - 47,000km2 across Kazakhstan, Tajikistan and Georgia
Exciting high impact exploration upside from:
Klymene oil prospect targeting a significant accumulation of oil
Bokhtar PSC - targeting prospective resources of 114TCF
Ideally placed to benefit from gas exports to China, with gas pipeline to drive demand and pricing
Strong partnership with supermajors Total and CNPC in Tajikistan
Excellent track record of success – 13 successful consecutive gas wells
- Balanced strategy with a focus on cash discipline to deliver shareholder value
The Kyzloi and Akkulka development is one of the first dry gas developments carried out in Kazakhstan with one of the first tie-ins by a non-State company to a major gas trunkline in Central Asia. Production commenced in December 2007.
Kyzyloi and Akkulka fields contain sweet (no sulphur), dry natural gas at shallow depths of up to 610 metres making for relatively low development and operating costs. The Kyzyloi and Akkulka fields are tied into the major Bukhara-Urals gas pipeline by a 56 km pipeline owned and built by the Company and with a design capacity of up to 2.0 million cubic metres per day (Mcm/d). Gas is pumped into the Bukhara-Urals trunkline at the Company's Booster Compressor Station (BCS) at 910 km on the trunkline. The BCS has been upgraded to take Phase 2 gas production and now consists of five separate compressor units plus continuous gas composition and flow measurement fully integrated into the Bukhara-Urals gas export system. Since Phase 1 commenced production, the Company has been very successful in exploring for new gas in the Akkulka area and has tested commercial gas from 15 of 20 wells.
Kazakhstan Shallow Gas Programme
Gas Sales Contract
TethysAralGas LLP, its 100% owned Kazakhstan subsidiary, has signed a gas sales contract for 2015 gas production.
A one-year gas supply contract has been signed at a price of US$75/mcm (US$2.12 per 1,000 cubic feet) net of marketing and distribution costs effective January 1, 2015 representing a 42% increase over the current realised gas price. This price has been realised despite falling oil and gas prices in Central Asia due to the impact of the fall in worldwide prices (Henry Hub spot price has fallen 30% to $108/mcm since December 1st, 2014). The achievement of the higher gas prices reflects the Company's view that despite these recent influences, the general direction of gas prices is on an upward trend due to the increasing demand from China as it moves from a coal based economy to utilising more gas. The Company believes that once gas shipments commence to China through the already built gas pipeline, it may achieve further increases in pricing some time in 2015.
The gas supply contract has been signed between TethysAralGas LLP and KazTransGas JSC ("KTG"), for the Kyzyloi and Akkulka natural gas fields. KTG is the national State appointed gas operator under Kazakhstan gas law and any domestic sales of gas are effectively made through this state body. TAG will have the ability to export gas to China and other export markets once this option becomes available.
The gas supply contract is for annual volumes up to 100 million cubic meters at the increased net price of US$75 per 1,000 cubic metres (US$2.12 per 1,000 cubic feet) net of marketing and distribution costs, and runs through to December 31, 2015. KTG has agreed that it will take any additional gas produced up to a total annual volume of 210 million cubic metres, but the structure of the contract also allows TAG to sell this additional gas outside of the contract should higher prices be achieved at a later date. This additional flexibility provides a significant advantage over the previous contract under which all gas was committed for the whole year.
It should be noted that the prices have been agreed in Kazakh Tenge as all sales contracts in Kazakhstan are signed with the prices set in National Currency. Due to concerns of a possible devaluation in the Tenge in 2015 it was agreed that in the case of a devaluation by more than 10%, the Parties shall agree to meet within 10 working days and try to renegotiate the price of gas. This is the first time the Company has managed to include this type of clause which is a significant improvement on the current gas contract whereby there was no potential resolution when the Tenge devalued in 2014 resulting in a lower realized USD price for the Company at that time.
Phase 3 of shallow gas production is now on stream and production from 12 wells has more than doubled to 520 Mm3/d since December 2014, a rate more than double the previous rate of 260 Mm3/d (9.1 Mscft/d) from a combination of existing wells along with some of those drilled and tested in 2014 (AKK17, 18 & 19) and previously drilled and tested wells (AKK15 &16) all tied-in on schedule. The recently installed dehydration system is performing well and expected to be commissioned by the State imminently.
Additionally it is planned to increase production later in 2015 with two more previously tested wells being brought online and with further optimisation of existing compression.
Kyzyloi Gas Production Extension Contract to 2029
In January, 2015 the Company announced that its wholly-owned Kazakh subsidiary, TethysAralGaz LLP ("TAG"), received permission from the Ministry of Energy of the Republic of Kazakhstan to extend the Kyzyloi Gas Production Contract (the "Contract") for another 15 years, from June 14, 2014 to December 31, 2029.
The Ministry of Energy granted the contract extension following the Kazakh State Reserves Committee's (GKZ) approval of the new State Reserves for Kyzyloi previously announced in May 2014. The Kyzyloi contract area was also increased by 56 percent to 449 km2 (110, 950 acres) and now encompasses a larger gas bearing area including the AKK05 well (to be worked over later in Q1 2015) and also the AKK08 & AKK10 successful gas wells.
JOHN BELL | Executive Chairman
John Bell is a Chartered Engineer with over 30 years' experience in the energy sector having worked at Vice President or Managing Director level at BP, Statoil AS and Suncor Energy (Syria). Mr. Bell has significant board level and corporate governance experience having served as a director on several boards both private and listed. He has spent a large part of his career in the Middle East, as well as time in the Former Soviet Union, North Africa, the Americas, the UK North Sea, Scandinavia & the Caribbean.
Mr. Bell received his Bachelor of Engineering with First Class Honours at Strathclyde University and completed an Executive Leadership Program at Haas Business School at the University of California, Berkeley. He is a Member of the Institute of Directors and the Institute of Engineering & Technology.
JAMES RAWLS | Non-Executive Director
Mr. James Rawls is a registered Petroleum Engineer with over 35 years industry experience in engineering and finance; he is currently the owner and manager of Rawls Resources, Inc., a private oil and gas exploration company. Mr. Rawls worked for Exxon Company USA in onshore and offshore development as a Senior Project Engineer, and later went on to a successful 12 year career in banking as Manager of the of Deposit Guarantee National Bank. In the early 1990's, he moved back into oil and gas exploration as president of Hughes-Rawls Corporation. Since that time, both in association with others as well as in entities owned individually, Mr. Rawls, has been involved in drilling oil and gas wells both onshore and offshore, in the United States and elsewhere. He is currently involved both in exploration and private investments.
Mr. Rawls serves or has served on the public company boards of Redcliffe Exploration Inc., Harcor energy Lending Department., Tikal Resources Corporation, and Aquest Energy, Ltd. as well as on the boards of numerous private companies, professional and philanthropic organizations. He holds a BS degree (distinction) in Petroleum Engineering from Mississippi State University and was named a Distinguished Fellow of the Bagwell School of Engineering in 2007.
DAVID ROBERTS | Non-Executive Director
David Roberts has over 30 years’ experience in the Oil and Gas industry. He is Managing Director of Woodfall Consulting Ltd., a consultancy he founded in 1999 and which specialises in analysis of asset development and drilling performance in the upstream oil industry Mr. Roberts’ primary client is Independent Project Analysis Inc., a global consultancy whose niche is capital efficiency in E&P capital projects, and where diverse work involves cross-discipline definition of engineering maturity and complexity of ongoing individual projects up to $50bn, root cause analysis of the performance of completed projects, and process mapping of capital project developments.
Mr Roberts has co-authored competent person reports (CPR’s) for AIM-listed E&P companies, and has performed drilling benchmarking studies for a major operator.
Prior to establishing Woodfall Consulting, Mr. Roberts worked at BP for 15 years, initially providing rock mechanics’ services to operational teams on issues such as wellbore stability and water injection, before moving on to become wells performance specialist, supporting global Drilling Management by coordinating BP’s worldwide wells performance management and benchmarking activities.
Mr Roberts earned his Bachelor of Science (First Class Honours) in Geophysical Science from Southampton University. He is a member of the Society of Petroleum Engineers (SPE) and acts as a SPE paper peer-reviewer.
DAVID BOTTING | Non-Executive Director
Mr. Botting has over 35 years¹ experience in investment, banking and the financial services industry. He currently manages a portfolio of investment funds and in recent years has also been engaged in freelance equities research and analysis work.
In 1995, Mr. Botting established the Botting Family Funds; a group of investment portfolios employing a 'Value' investment strategy and focussing on the Oil and Gas, Media and Retail Sectors.
From 1989 to 2012, Mr. Botting established and managed an FSA regulated 'Business Acquisition and Development Funding' Brokerage and Consultancy service which operated in the SME sector. He retired from the brokerage operation in 2012 to focus solely on the management of the family funds.
From 1978 to 1988, Mr. Botting worked for the U.K. banking subsidiary of Household International (now HSBC Finance Corporation). He attained the position of Senior Manager for the bank and held the relevant banking qualifications required to carry out these duties at the time.
DAVID HENDERSON | Non-Executive Director
David Henderson has over 30 years' experience in the Oil and Gas industry. He is currently President of WBH Energy Partners LLC, a privately held company developing resource plays in Texas. Mr. Henderson previously served as Executive Vice President & Chief Operating Officer for EEX Corporation listed on the NYSE (now part of Newfield Exploration) from 1997-2002. In this role, he oversaw the acquisition and integration of Tesoro domestic assets. From 1991 to 1997, Mr. Henderson served as Senior Vice President for Exploration and President of International Exploration & Production at Pennzoil Corporation. From 1987 to 1991, Mr. Henderson served as Senior Vice President of International Exploration & Production at Maxus Energy Corporation.
Mr. Henderson graduated from Virginia Polytechnic Institute and State University in 1973 with a Bachelor of Science in Geophysics. He currently serves as Chairman of the Dean's Advisory Board at the College of Arts and Sciences, Virginia Tech, as well as being a Member of the Campaign for Virginia Tech's National Campaign Steering Committee.
ADEOLA OGUNSEMI | Non-Executive Director
Adeola Ogunsemi is an experienced oil and gas professional with 16 years of industry experience out of his total 20 years work experience. He is currently the Chief Financial Officer of Oando Energy Resources, a leading African exploration and production company, listed on the Toronto Stock Exchange (TSX) in Canada and has been with the company and its subsidiary for more than 6 years. He was with BP America for 5 years, rising to become Assistant Controller.
Before joining BP America, he worked for Northern Illinois Gas in Chicago, USA, for 4 years, the Chicagoland Chamber of Commerce and Midas International in Chicago, USA.
Adeola obtained a Master of Business Administration (MBA) in Finance and Strategic Management from the University of Chicago Booth School of Business in 2003 and a Bachelor of Science in Accounting and Finance from DePaul University in Chicago in 2000. He has been a member of the American Institute of Certified Public Accountants for 16 years. He is also a Chartered Global Management Accountant (CGMA) in the USA and an Associate Chartered Accountant in Nigeria.
Principal Executive Office
Tethys Petroleum Limited
P.O. Box 524, St Peter Port
Guernsey, GY1 6EL, British Isles
Phone: +44 1481 725 911
Fax: +44 1481 725 922
Email: [email protected]
27th Floor, Millbank Tower
London, SW1P 4QP
Phone: +44 20 7821 6128
Fax: +44 20 7828 6034
Email: [email protected]
Business Center "Dastan Center"
2 Bokenbai Batyr Street
Phone: +7 (7132) 41 66 20/21/23
Fax: +7 (7132) 41 66 22
Email: [email protected]
48 Ayni Street
Phone: +99 248 7011 717
Fax: +99 248 7011 718
Email: [email protected]
Business Center "Old Square"
98 Panfilov Street
Phone: +7 (727) 244 69 23/4/5
Fax: +7 (727) 244 69 26
Email: [email protected]
Street 2/Tabidze 1
Business Centre Tabidze 1