Dear Friends and Investors,

What is going on? Well, a whole lot. Let us start with our operated blocks. We’re approaching several important milestones in our portfolio. Block 56 has taken large steps towards commerciality with the successful results from the Menna-1 well drilled earlier this year and the ongoing re-testing of the Sarha-3 well. The Field Development Plan for the block is nearing completion, and we expect to present it to the Omani Ministry of Energy and Minerals later this month. It will propose the development of the Al Jumd, Menna and Sarha discoveries and outline substantial future appraisal and exploration upside within Block 56. We are hopeful that the plan will be rapidly approved by the MEM, with a Declaration of Commerciality for Block 56 as a result. This will enable production to resume on the block, giving Tethys a second Omani commercial production stream as a complement to the production from Blocks 3&4. It will also enable us to book the reserves and resources attributable to Block 56, increasing our overall reserves. A Declaration of Commerciality for Block 56 will be a major milestone for Tethys, one that could very well be reached within the coming quarters.

Block 58 is in an earlier stage of the exploration cycle, and by mid-June we expect to begin drilling the Kunooz-1 well, targeting more than 120 million barrels of prospective resources. The well carries a chance of success of above 20 percent, which when compared to the resource potential has an excellent risk/reward ratio. In the case of success, Kunooz-1 will be transformative for Tethys, and we believe the well to be one of the highest profile ones to be drilled this year in Oman.

On Block 49 we are also moving forward. We elected to enter the second exploration phase to allow for the proper evaluation of the Thameen-1 well, as well as to increase the understanding of the true potential of the block and the well’s surrounding areas.

So, what hides on the other side of the coin? Well, while the operated portfolio is doing very well indeed, Blocks 3&4 have had a couple of challenging past years. On the positive side baseline production appears to stabilise and the operator CCED is increasing the exploration, appraisal and Gas-to-Power activities, strengthening the blocks for the future. However, costs and investments have gone up in recent years. Our guidance for 2024 included lower production and, unless oil prices rise, less free cash flow, than previous years from Blocks 3&4. So, for the first time in many years, Tethys is in a position to high-grade the now multiple opportunities available to us and put greater emphasis on how we allocate our resources. In February we announced that the Board instigated a strategic review to address this situation and ensure that Tethys is in a strong position to capitalise on these opportunities going forward. The review is still ongoing, but a few important decisions have been made.

The Board has proposed no dividend for the financial year 2023. The dividend policy remains firm, but with strong demand for capital we need to reposition ourselves for future growth.

To enable growth, a loan facility is being finalised with a bank in the United Arab Emirates to allow for further flexibility in pursuing our various projects. To assist the Board in evaluating the best way forward under this strategic review, the Board has mandated a financial advisor, the investment Bank Jefferies, to advise the Board on possible strategic alternatives to optimise Tethys’ portfolio and future strategy.

Since 2015, we have distributed SEK 43 per share to our shareholders and we remain committed to offer superior returns to shareholders and stakeholders alike. We have a wide palette of opportunities with Block 56 being the most mature to offer future growth, not without similarities to where Blocks 3&4 was ten years ago.

Our immediate target is to set a growth strategy and resume cash dividends as soon as possible. We pursue the imminent commercialisation of Block 56, the drilling of Kunooz-1 and eagerly await the evaluation of strategic alternatives for our portfolio of assets.

So stay with us, we have had a large period of harvest, we now enter a phase of growth and investments which should lead to harvest again.

Stockholm, May 2024
Magnus Nordin
Managing Director