Third quarter and nine months report - 30 September 2019

Third quarter 2019 (second quarter 2019)

• Record Production from Blocks 3&4, Oman, at 13,053 bopd (12,881 bopd)
• Revenue and other income of MUSD 40.7 (MUSD 41.3)
• EBITDA of MUSD 26.6 (MUSD 27.9)
• Net result of MUSD 14.9 (MUSD 17.3)
• Earnings per share amounted to USD 0.44 (USD 0.51)
• Exploration well Maather-1 spudded, drilling is ongoing
• Acquired a 20% interest in Block 56, Oman

Letter to shareholders

Dear Friends and Investor,

The highlights of this letter can be summarised in three numbers:

• 13,053
• 49
• 56

13,053 barrels per day is the highest quarterly average daily oil production Tethys Oil has received from Blocks 3&4 ever!

49 is for Block 49, where the seismic interpretation and the incorporation of the new data into our geological model has confirmed our expectation that the block is more prospective than history has shown. Our initial, well focused, seismic campaign has identified one drillable prospect and several leads and potential leads within the new 3D and 2D seismic areas. Details will follow and we must remember that Block 49 at this stage is in the exploration phase and still carries geological uncertainty – but we are off to a very good start! In the first half of next year, we plan to drill a very interesting exploration well which we naturally hope will result in a commercial discovery, but also will provide data to further enhance our understanding of the petroleum potential of Block 49.

56 is for Block 56, which is the farm in we announced late in October and is still subject to government approval. Block 56 is very much a Tethys Oil project, the kind of project we have been trying to secure for some time. It makes very good sense technically in that Block 56 is located a mere 200 km from the southern border of Blocks 3& 4 and part of the block offers a similar geology to Blocks 3&4. It is a project were Tethys Oil’s technical expertise can make a real contribution towards future success.

Operationally we note that some interesting exploration work has been carried out by the current operator and Tethys Oil is able to enter the block in time to flow test three wells that have already been drilled. In effect we can take a shortcut and skip the drilling and go straight for the result - the testing of wells. And worth noting, the ‘entry price’ is quite low. So, if the block works as we hope, we are about to enter a new block that could have the kind of potential that Blocks 3&4 had ten years ago. So, the risk reward ratio is extremely attractive.

Needless to say, we will have ample reason to get back to Block 56 in the near future. Just as we will have reason to keep you updated on progress on Block 49 in relation to drilling preparation activities and as more information on the targeted prospect becomes available. But in the meantime, let us return to those 13,053 BOPD produced, net to Tethys Oil, during the third quarter from Blocks 3&4.

Our main asset had another good quarter. Record production followed the continued fine tuning of primarily the Ulfa facility but also successful drilling of production wells on Shahd field and remedial and maintenance work on the older fields. Average production costs are well within our expectations and production cost per barrel was USD 10.1 for the quarter. Our record production levels were slightly offset by the marginally lower oil prices acquired resulting in revenues and other income of MUSD 40.7 - in line with the second quarter 2019. Cash flow remain strong and resulted in our net cash position increasing during the quarter from MUSD 62.0 to MUSD 71.9.

On the exploration side, the well Maather-1 is currently drilling whereas the Yusr-1 well has completed drilling and encountered oil shows. However, Yusr-1 did experience some difficulties during drilling and testing operations. Although the well indicated good oil shows while drilling testing has so far been inconclusive, but work continues and we remain hopeful of a successful well test later this year.

But for now, let us rejoice in the 13,053 BOPD and all the other activities we offer. And also do not forget the second part of the 2019 dividend, SEK 1.00 per share, that is payable in November.

Stay with us – it has been a few years since we had this much activity to offer for the near future.

Stockholm, 5th November 2019
Magnus Nordin
Managing Director

For further information. please contact:
Magnus Nordin. Managing Director. phone: +46 8 505 947 00
William Holland. CFO. phone: +46 8 505 947 00

Conference call
Date: 5 November 2019
Time: 10.00 CET

To participate in the conference call, you may choose one of the following options:

Link to webcast: https://edge.media-server.com/mmc/p/aqzaw3i6

To participate via phone, please call:
Sweden: +46 8 566 426 51 / PIN: 93858145#
Switzerland: +41 225 809 034 / PIN: 93858145#
UK: +44 333 300 0804 PIN: 93858145#
United States (Toll-Free): +1 855 857 0686 PIN: 93858145#

This information is information that Tethys Oil AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication. through the agency of the contact person set out above. at 7:30 CET on 5 November 2019.

Tethys Oil AB (publ)
Tethys Oil is a Swedish oil company with focus on onshore areas with known oil discoveries. Tethys Oil's core area is Oman, where the company holds 2P reserves of 25 mmbo and 2C Contingent Resources of 13 mmbo and had an average oil production of 11,767 barrels per day from Blocks 3&4 during 2018. Tethys Oil also has onshore exploration licences in Lithuania and France and some production in Lithuania. The shares are listed on Nasdaq Stockholm (TETY). Website: www.tethysoil.com