DUSHANBE, January 13, 2009, Asia-Plus — Tethys Petroleum Limited (Tethys) on January 9 announced that the Company, on behalf of its wholly owned subsidiary, AOE Tykhe B.V., (“Tykhe”) has secured and received loan financing from a group of accredited investors in the amount of USD2 million net toward the purchase of a new ZJ30 drilling rig from China, press release issued by Tehtys said.
The ZJ30, a 180-ton hookload diesel truck mounted mechanical drilling rig, is capable of drilling to approximately 11,483 feet (3,500 meters). It is already manufactured and currently being mobilized to Tajikistan where it is planned to be used to deepen existing wells and drill new wells including potentially horizontal and inclined wellbores on existing discoveries. This rig will provide additional flexibility and should provide significant cost savings in future drilling programs compared to short term leasing from third party contractors.
The loan is a 3-year loan with interest due quarterly the first year, monthly payments of interest and capital for the remaining two years and a final balloon payment of 50% of the principal at the end of the three-year term. The annual interest payable is 15% and 638,298 warrants to purchase Tethys shares were also issued to the lenders with a term of 3 years and an exercise price of CAD1.25.
In addition Tethys announced that its wholly owned subsidiary Asia Oilfield Equipment B.V. has reached agreement on the acquisition of a Coiled Tubing Unit whereby Tethys will issue 1.4 million restricted shares for part-payment of the equipment. This equipment has been delivered to Tajikistan and has been fully tested. It will be used initially to carry out workovers on the numerous existing wells available under the Bohktar Production Sharing Contract with the aim to bring on stream early production.
Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan and Tajikistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
