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Tethys Petroleum Signed MoU to Acquire Interest in Tajikistan PSC

Sunday 28 October 2012

TORONTO (Tethys Petroleum press service) – Tethys Petroleum Limited (TSX:TPL, LSE:TPL) announced that Kulob Petroleum Limited, its subsidiary, which is the Contractor party to the Bokhtar Production Sharing Contract (Bokhtar PSC) in Tajikistan, has signed a Memorandum of Understanding (MoU) to execute a farmout agreement on the PSC. The potential acquiring party is an international oil and gas company.

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Petroleum Geology and Resources of the Amu-Darya Basin, Turkmenistan, Uzbekistan, Afghanistan, and Iran (PDF)
The Amu-Darya basin is a highly productive petroleum province in Turkmenistan and Uzbekistan (former Soviet Union), extending south-westward into Iran and south-eastward into Afghanistan. The basin underlies deserts and semi-deserts north of the high ridges of the Kopet-Dag and Bande-Turkestan Mountains. On the northwest, the basin boundary crosses the crest of the Karakum regional structural high, and on the north the basin is bounded by the shallow basement of the Kyzylkum high. On the east, the Amu-Darya basin is separated by the buried southeast spur of the Gissar Range from the Afghan-Tajik basin, which is deformed into a series of north-south-trending synclinoria and anticlinoria. The separation of the two basins occurred during the Neogene Alpine orogeny; earlier, they were parts of a single sedimentary province.

Based on the terms contained in the MoU, the parties will now negotiate a farmout agreement and a joint operating agreement, which are planned to be executed in the near future, whereupon the farmee and all commercial terms will be disclosed. The farmout is subject to final agreement on the commercial and legal issues, finalisation of due diligence and Tajik governmental approval. A period of exclusivity has been granted to the farmee during the negotiations.

The 25-year Bokhtar PSC was signed in 2008 and covers a total area of approximately 35,000 km² in the Afghan-Tajik portion of the prolific Amu Darya basin west of the Pamir mountains. The area included in the PSC is in the south-western part of Tajikistan and is a large, highly prospective region which has existing oil and gas discoveries but which has seen limited exploration to date. An independent Resource Report (dated June 30, 2012) estimates Gross unrisked mean recoverable resources of 27.5 billion barrels of oil equivalent, consisting of 114 trillion cubic feet (3.22 trillion m³) of gas and 8.5 billion barrels of oil.

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.

The Amu-Darya basin is dominantly gas prone; gas fields are known in all structural units of the basin, whereas only a few relatively small oil fields have been discovered in the very marginal north-eastern and south-eastern parts of the basin. Petroleum exploration in the Amu-Darya basin began before the World War II. In 1953 the first relatively small gas discovery in the Setalantepe field was made on the Bukhara step. This discovery gave rise to extensive exploration effortsand in 1956, the first giant field, the Gazli gas field, with original reserves of more than 25 TCF, was discovered, also on the Bukhara step.

Tethys Petroleum CEO Dr. David Robson said at the time of the finding that the Tajik deposit holds more energy potential than United Kingdom holdings in the North Sea. “Geological and geophysical work undertaken has shown that Tethys is operating in a world class basin with enormous and untapped potential,” he said in July. “The deep prospects being pursued in Tajikistan have super-giant potential and any exploration success will be transformational for the company.”

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