Tethys Petroleum - Doris fueling the drilling of Tajikstan

3) Mr Robson made the claim of being cash generating in an interview (not an RNS) but then didn't expand on it at all, bizarrely moving straight on to the new loan facility , given how key the cash neutral or better issue is to the investment case , why so shy?

They are not allowed to be open about the cashflow - Listen to the proactive investor audio again, I guess you have to wait for the results. I don't think the Canadian stock exchange allows the release of sensitive information i.e. numbers.  However 8000 boepd at a $34 netback is $280k daily or $7.84m a month or $94m/year.

SP note on TPL

Full of eastern promise

Tethys Petroleum is focused on oil and gas exploration and production in Central Asia. This highly prolific region continues to yield significant rewards, most recently illustrated through the company’s 27.5bnbbl resource upgrade in Tajikistan. With near term production also due to ramp up in Kazakhstan, we feel the current share price represents compelling value for investors.

Significant resource upgrade

Tethys recently announced its latest resource estimates for its Tajikistan operations. The numbers demonstrate a significant upgrade of the company’s mean recoverable prospective resource base. The headline unrisked figure of 27.5bnbbls consists of 114tcf of gas, and 8.5bnbbls of oil and condensate, suggesting the asset is greater than the remaining resources in the North Sea. Considering that Tethys now has an 85% interest in the Bokhtar PSC following the recent acquisition of an additional 34% stake, the upgrade further illustrates management’s ability to seek high value yielding assets.

Near term production could peak at 6000bopd

To date, over 13,000bopd has been tested from exploration and appraisal wells in and around the company’s Kazakh operations. We therefore believe that a sustainable production level of 5-6,000bopd can realistically be achieved from these wells. Although the company currently sells to the domestic market, the field economics even at this pricing level illustrates the commerciality of the company’s assets.

Unique positioning

Tethys is the only independent oil and gas company with operations in three of the Central Asian Republics with exploration and production in Kazakhstan, Tajikistan and Uzbekistan. All Tethys' projects are located in close proximity to the main regional pipelines allowing the company to tie in cost-effectively and enjoy diversification of supply.

Valuation and recommendation

Our valuation illustrates that Tethys is currently trading below its core asset value, with the market not currently attributing value to its contingent resources or the significant prospective resource upgrade in Tajikistan. On this basis, we initiate coverage with a BUY recommendation, with a pre drill target price of 72p.

First Energy Comment

Stephane Foucaud, First Energy Capital (7/20/12) "We reiterate our Speculative Buy recommendation on Tethys Petroleum Ltd. with a Target Price of CA$1.70/share following the announcement that the company's gross prospective resources in Tajikistan have been estimated at 27.5 Bboe. . .importantly, this has to be read in the context of ExxonMobil's reported interest in assets in Northern Afghanistan on the other side of the border, suggesting super majors are looking at the region; with this new resources assessment, Tethys is now the company offering exposure to the largest unrisked resources in our coverage universe"

http://trumanproject.org/doctrine-blog/exxon-mobil-in-afghanistan-a-shot-in-the-arm-for-kabuls-ailing-economy/

http://www.reuters.com/article/2012/07/16/afghan-energy-idUSL3E8IA3FP20120716

Afghanistan may attract more energy firms as Exxon shows interest

Mon Jul 16, 2012 2:09am EDT

* Eight companies, including Exxon Mobil, express interest

* Six blocks offered in Afghan-Tajik region in latest round

...Eight firms including Exxon this month expressed interest in an oil and gas auction of six blocks in the Afghan-Tajik basin, after a tender was won by China National Petroleum Co (CNPC) late last year....

2Q Results

http://www.investegate.co.uk/Article.aspx?id=20120815070028M3125

In reply to Isaac, post #42

Cross posting from TMF, grateful for any observations;

Morning

Hmm it's never simple is it with Tethys?

First up I assume the PSC structure has altered since last year? If so the total revenue line is up only 321k?

The loss for the quarter is up from 2.7m to 4.9m at the post tax level, worryingly (?) this is after a tax charge of 431k which suggests a rather harsh tax regime! There is also a current tax liability of 210k..and deferred tax has risen by 361k.

As always cash is down from 10.7m to under 4m and they've started to draw down the 16m Kazak loan.

Can anyone shed any light on the water cut increase?

So they appear to have less confidence in Doris and thus far shareholders are doing a lot worse than the Kazak exchequer.

All the upside is fine and dandy but this one is all about the cash and tax position and the geology of their cash cow Doris.

Let's see what the Market makes of it!

Cheers

Stephane Foucaud, First Energy Capital (8/16/12) "We reiterate our Speculative Buy recommendation on Tethys Petroleum Ltd. with a target price of CA$1.70/share following the publication of the company's Q2/12 results. . .as the company prioritizes the use of its operating cash flow, the Kalypso prospect is now likely to be tested in Q1/13. . .importantly, a farm-in partner in Tajikistan could be announced by the end of 2012 and the AKD-07 well, targeting ~140 MMbbl possible reserves plus prospective resources, is due to spud next month."

http://www.theenergyreport.com/pub/co/1424?utm_source=delivra&utm_medium=email&utm_campaign=streetwise-reports%2008/16/2012%2015:06:56&utm_term=TPL%3a+AKD-07+Due+To+Spud

Worth listening to the conference call from the results presentation :

http://www.tethyspetroleum.com/tethys/irwebcasting.action

I am divided as to whether I should increase my position further here quite simply because they could run out of cash. I like the company a lot and when the company says they have no intention of placing any shares at current levels you want to believe them.

But with any old small cap one needs to be sceptical and be prepared for the management to disappoint - Such is the nature of these kind of stocks.

My view is if Tethy's can deliver the profitability Julian Hammond mentions in the cc & demonstrates a growing cash pile then I would rather buy more shares at 5-10p higher.

I think there are a lot of people that hold the wait and see approach though which is why I think if there is a decent indication of cash flowing on to the balance sheet we could have a swift re-rating.

Hi Isaac

I too listened to the conference call but felt the statement about Q3 profitability was rather blurted out than a considered utterance, looking at the Q2 numbers and knowing the reduced production in July I also couldn't see how they could achieve it. Accordingly I emailed the company on Wednesday asking them to confirm the statement was made, so far I have had no response

Cheers

Worth "Re-tweeting" JTCod's post as I fully agree :

http://uk.advfn.com/cmn/fbb/thread.php3?id=27040151&from=5041

Most of the biggest profits in E&P investment over the last decade have come from stocks that have been forgotten, perhaps had the odd disappointment too but had significant potential upside. What makes TPL different from those blue sky high potential investments is that TPL already has a proven field and decent production. The fact that TPL is currently forgotten by the market is simply an opportunity imo.

Notice of spudding would be nice but it's news on the result that really matters and in the meantime if the price languishes I don't see that as a problem for the medium to long term investor.

We have taken the opportunity to buy past 1.25% of TPL and not only feel comfortable but we believe this is one of the best balances of risk reward we are likely to see in our investment lives.

As Martin says, the potential here is life changing. The short term means nothing imo. Though there still remains a potential here for Christmas to come early given that both the Farm-in and result of AKD07 are expected to be concluded around Nov/Dec.

FANTASTIC news Dr Dave Robson has recovered from his illnes and is now back with the company!!

http://www.investegate.co.uk/Article.aspx?id=20120910070013M6973

ADK07 has spudded - to take 55 days, seismic acquisition on Tajikstan has commenced, farm in partner discussion ongoing for Tajik, to be concluded by year end.

http://www.investegate.co.uk/Article.aspx?id=20120910070013M6973

I think the stock is ready to move up again imo.

Decent vol in TPL today, looks like seller finally clearing off.

If DYNA comes in - in the coming weeks then I think TPL could double in a short period of time as the cashflow would be trsnsformational and the market would have more confidence in realising the significant upside.

I also think a lot of sceptics like Rhomboid et al would jump in - You pay more for certainty.

Yeah it was a surprise to see it close up so marginally when , at one point, it was a good 5-6% higher.

One of the patient I suspect.

Big rise in Toronto this evening........This is going to get VERY EXCITING!!! :-)

Unfounded "takeover rumour"comments from Oilman on Advfn - not sure of his reliability. Might explain the sudden burst of interest.

Hi Fangorn

No idea what is driving the rise but I'd attach no credibility to that poster as he appears to find it easier to attack posters than rebut a serious point.

Fwiw I'm still on the sidelines as I await news on drilling

Cheers

Yeah I suspected as much Rhom.
It'd be a strange occurrence given that Soros still has 5-8m shares to sell allegedly.

Nice to see some relative strength though,and definitely a stock worth tucking away.

From the preliminary announcement - Shares down 17%

Only good news is that the OWC in the Jurassic was found 30m down from the previous well. IF that flows then it could add 7-10mm bbls to the 2P.

Tethys Petroleum Limited: AKD07 Preliminary Results

BOZOI, KAZAKHSTAN--(Marketwire - Oct. 12, 2012) - Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) ("Tethys" or "the
Company") today announced the preliminary results of exploration / appraisal well AKD07 drilled in the Akkulka Block in
Kazakhstan. The initial drilling and electric log results show potential hydrocarbons in the Jurassic limestone sequence
and lower down in a thin Jurassic sandstone near the current total depth of the well.

The "Dyna" sheet sand and the "Doris" channel sand were both present and of good quality but both have been interpreted
as being water bearing. Drilling is now about to recommence on the well towards a planned total depth ("TD") of 2,750
metres in order to more fully assess the potential hydrocarbon bearing zones in the Upper Jurassic sand sequence.

The current total depth is 2,585 metres in the Upper Jurassic sequence with a thin potentially oil bearing sand having
been encountered just above total depth. The Upper Jurassic limestone interval (which tested at 1,373 bopd in well AKD01
and 1,568 bopd in well AKD05, where it is completed as a producer) some 1.75 km and 1.8 km away respectively has a gross
thickness of some 22 metres. Drilling and wireline log data indicate moveable hydrocarbons within this zone. This is
approximately 30 metres deeper than the previous lowest known oil in the nearby wells within that horizon and if
confirmed to be oil bearing would significantly increase the potential reserves at this level.

Further analysis of the log data on the Jurassic limestone is currently underway and drilling is about to recommence to
a new planned TD of 2,750 metres in order to fully assess the potential of the Upper Jurassic sand interval. At this
point a decision will be made on running casing and testing the well. It is expected that the new TD will be reached
within the next week.

Dr. David Robson Executive Chairman and President of Tethys commented: "Although the Dyna and Doris sands were water
bearing in this well the potential oil in the Jurassic limestone and the Jurassic sandstone sequence is encouraging,
particularly with regard to the upside reserve potential. The good quality of the sheet and channel sands is also
positive for further exploration in the area despite the trapping mechanism not working at this location.

We will obviously continue to assess this well as we drill towards the final TD and also assess the other prospects in
the area. In parallel with this we are working hard to improve the efficiency of our oil export system and at reducing
our cost base in Kazakhstan to more economically develop the Doris oilfield and adjacent deposits."

Indeed DJP - not a good morning for holders of either WZR or TPL

Tethys Petroleum Limited: AKD07 to be Tested

BOZOI, KAZAKHSTAN--(Marketwire - Oct. 18, 2012) - Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) today announced that it had reached a Total Depth ("TD") of 2,750 metres on the AKD07 exploration/appraisal well and has now run the production liner in order to test the Jurassic carbonate zone which appears to be oil bearing from the drilling and wireline log results.

http://www.investegate.co.uk/Article.aspx?id=20121018065957M0333