First quarter report 2015

* New production record during first quarter 2015. Average daily
production is up 4 per cent quarter on quarter. Total production
amounted to 784,207 barrels corresponding to 8,714 barrels per day
* First quarter 2015 net sales of MSEK 163 compared to MSEK 310 in the
fourth quarter 2014, a decrease with 47 per cent quarter on quarter.
The sales decrease is due to both a movement from over to underlift
position of more than 90,000 barrels and lower achieved oil price
* Net cash position of MSEK 371 as per 31 March 2015 compared to MSEK
347 as per 31 December 2014. The currency exchange effect on cash and
cash equivalents amounted during the first quarter 2015 to MSEK 44,
which has positively affected net result
* Net result after tax during first quarter 2015 amounted to MSEK 39.
The result is up 116 per cent compared to MSEK 18 during fourth
quarter 2014. The result for the fourth quarter 2014 was negatively
affected by write downs of MSEK 127
* First quarter 2015 earnings per share before and after dilution
amounted to SEK 1.11 compared to SEK 0.51 during fourth quarter 2014
* Board of directors propose to the AGM 2015 a distribution to
shareholders of SEK 3.00 per share
| MSEK (unless specifically stated) | First quarter 2015 | Fourth quarter 2014
| First quarter 2014 | % Q1 2015 to Q4 2014 |
| Production, before government take (bbl) | 784,207 | 768,226 | 608,582 | 2% |
| Average daily production, before government take (bbl) | 8,714 | 8,350 |
6,762 | 4% |
| Net sales, after government take (bbl) | 308,892 | 434,035 | 280,782 | -29% |
| Average selling price per barrel, USD | 63.80 | 97.09 | 106.56 | -34% |
| Net sales of oil and gas | 163 | 310 | 195 | -47% |
| EBITDA | 76 | 200 | 130 | -62% |
| Operating result | 13 | 14 | 83 | -7% |
| Result for the period | 39 | 18 | 58 | 117% |
| Earnings per share before and after dilution, SEK | 1.11 | 0.51 | 1.62 | 118%
| Net debt/(net cash) | (371) | (347) | 60 | 7% |
| Investments | 131 | 101 | 45 | 30% |
Dear Friends and Investors
The first quarter 2015 is, as expected following the fall in oil prices,
considerable weaker than previous quarters. But we are happy to report
that Tethys remains profitable. Our sales in the first quarter 2015
amounted to MSEK 163. Our EBITDA amounted to MSEK 76 and our net result
amounted to MSEK 39.
During the quarter 2015, we continued to invest heavily in Blocks 3 and
4. Total investments of MSEK 130 were made in wells, seismic studies and
infrastructure. Drilling activity increased markedly, and eleven wells
were completed in the first quarter. And at least so far this year,
production has responded very well to our investments. We reported a new
quarterly production record of 8,714 barrels of oil per day for the
first quarter and March showed the highest production we ever had in one
month with our share of production from Blocks 3 and 4 amounting to
9,154 barrels of oil per day.
Our strong cash position, which at the end of the first quarter stood at
MSEK 400, corresponding to more than SEK 11 per share, and our financial
and operational numbers for the first quarter suggest that Tethys must
be one of the financially strongest oil companies of our peer group. We
have a solid balance sheet, also after the proposed distribution to
shareholders of SEK 3 per share. Our large pile of cash and untapped
credit line of up to MUSD 100, give ample room for continued investments
as well as for other opportunities and/or further distributions to
Looking forward, indications are that we may have seen the bottom of the
oil price. Volatility has dropped dramatically the last couple of
months. We are currently seeing Brent trading at well over USD 60 per
barrel. A price level that we are quite comfortable with!
We expect drilling activity to remain at a high level also going
forward. New rigs have been contracted and are expected to start work
later this summer bringing us to a total of five rigs in operation. We
believe that our oil production will continue to increase in 2015, but
we expect the monthly production numbers to fluctuate.
Leaving the deserts of Oman and looking across the Baltic Sea to
Lithuania, the production on the Gargzdai licence is currently cash flow
positive, even if barely so. In the near term, we have higher hopes for
the Raseiniai licence further to the east, where the exploration
programme will enter the drilling phase later this quarter.
So stay with us – we are in a strong position and we intend to
strengthen it further! And remember, an oil price of USD 60 per barrel
is not a bad price. At least not for us!
Stockholm in May 2015
Magnus Nordin
Managing director
For further information, please contact:
Magnus Nordin, Managing director, phone: +46 8 505 947 00
Morgan Sadarangani, CFO, phone +46 8 505 947 01
This report has not been subject to review by the auditors of the
Tethys Oil is a Swedish energy company focused on exploration and
production of oil and natural gas. Tethys Oil’s core area is Oman, where
the company is one of the largest onshore oil and gas concession
holders. Tethys Oil also has exploration and production assets onshore
Lithuania and France.
The shares are listed on Nasdaq Stockholm (TETY).