Fourth quarter report 2015

* Production amounted to 10,956 barrels per day, up 9 per cent compared
  to the third quarter 2015
* Revenue amounted to MSEK 222, down 13 per cent compared to third
  quarter 2015
* Net result amounted to MSEK 27, down 65 per cent compared to the third
  quarter 2015
* Earnings per share amounted to SEK 0.78 during fourth quarter 2015
* The board of directors propose to the annual meeting a dividend of SEK
  1.00 per share
* As per 31 December 2015 audited reserves Block 3&4 Oman net to

          - 1P reserves 12,905 thousand barrels (11,794)

          - 2P reserves 18,244 thousand barrels (17,779)

          - 3P reserves 27,863 thousand barrels (25,080)

* The increase in 2P reserves represents an internal reserve replacement
  ratio of 113 per cent
* Seven new wells completed during the quarter on Blocks 3 and 4
* New reservoir, the Lower Khufai in the Shahd field, boosts production

| MSEK (unless specifically stated) | Fourth quarter 2015 | Fourth quarter 2014
| Third quarter 2015 | 
|   |   |   |   |
| Net daily production before government take (bbl) | 10,956 | 8,350 | 10,087 |
| Net barrels sold, after government take (bbl) | 366,746 | 434,035 | 584,399 |
|   |   |   |   |
| Average selling price per barrel, USD | 47.90 | 97.09 | 61.77 |
|   |   |   |   |
| Revenue | 222 | 281 | 255 |
| EBITDA | 113 | 181 | 153 |
| Operating result | 30 | -5 | 76 |
| Result for the period | 27 | -1 | 78 |
| Net cash | 436 | 372 | 485 |
| Investments in oil and gas properties | 79 | 101 | 85 |
|   |   |   |   |
| Earnings per share, SEK | 0.78 | -0.02 | 2.23 |


 [1] Tethys Oil has made changes to its accounting principles with
regard to valuation of underlift and allocation and presentation of
over- and underlift compared to previous reports, which has had an
effect on current as well as historic financial data. Historical
financial data has been restated in accordance with the new accounting
principles. Please see page 17 and section “Accounting principles” for
more information.

| MSEK (unless specifically stated) | Full year 2015 | Full year 2014 |
|   |   |   |
| Net daily production before government take (bbl) | 9,804 | 7,692 |
| Net barrels sold, after government take (bbl) | 1,805,056 | 1,464,228 |
|   |   |   |
| Average selling price per barrel, USD | 58.09 | 103.87 |
|   |   |   |
| Revenue | 905 | 1,027 |
| EBITDA | 496 | 743 |
| Operating result | 194 | 393 |
| Result for the period | 198 | 340 |
| Net cash | 436 | 372 |
| Investments in oil and gas properties | 324 | 259 |
|   |   |   |
| Earnings per share, SEK | 5.66 | 9.56 |


Letter to shareholders


Dear Friends and Investors

Also in this fourth quarter report, events outside of our control -
movements in the oil price - have had a large impact on our results. The
oil price has fallen for 18 months and as we entered January 2016, the
fall accelerated before bouncing in mid January. At the time of writing,
there are signs that the week of January 15 saw the bottom of the
downturn. Irrespective of whether we have seen the low of the cycle or
not, I strongly believe we are close in time to the end of the down
turn. Prices will bottom out and stabilize. At what level prices will
stabilize and how quickly they rise again is a different matter. In any
case, Tethys will be able to continue to generate a positive gross
profit also at prices below 30 dollars per barrel!


Strong production growth

Now, turning to more pleasant subject, namely events that are under our
control. A year ago, we believed that we had every reason to expect our
production to continue to increase also in 2015. And in fact, in 2015 we
produced more oil than ever before. Our oil production increased at an
average pace of over seven per cent each quarter, and by the end of the
year, we had produced 31 per cent more oil in the fourth quarter 2015
than we did in the last quarter 2014. And, just like the oil price but
in the opposite direction, the rate of increase accelerated in January
and average daily production for the year’s first month surpassed 12,000

The recent surge is primarily related to the successful bringing on
stream of a new reservoir within the Shahd field, the Lower Khufai
Carbonates. This new reservoir has responded very well to horizontal
drilling, and is dramatically complementing the other primary producer
in Shahd field, the Buah layer.


Reserves continue to increase

A year ago we were also optimistic that our reserve numbers would
continue to increase also in 2015. And indeed our 2P reserve replacement
ratio stands at 113 per cent. The 1P number is even better showing an
increase in absolute numbers of more than one million barrels
underscoring the robustness of our producing reserves. So having moved
reserves from 3P into 2P and 1P we are happy to note a 3P number of 27.9
million barrels as we enter 2016, showing an increase of almost 3
million barrels for the year after taking account of the 3.5 million
barrels produced in 2015.


Continued positive financial results

Our average selling price fell 22 per cent quarter on quarter down to
USD 47.9 per barrel. In the fourth quarter, we report revenues of MSEK
222. Our EBITDA for the quarter amounted to MSEK 113. Our cash flow from
operations amounted to MSEK 23, and our net result amounted to MSEK 27.
Our net cash stood at MSEK 436 as per 31 December 2015.



Our two Blocks onshore the desert of the Sultanate of Oman have turned
into a world class asset. A few years ago we described the Blocks as a
smorgasbord of opportunity – and what a buffet they have turned into.
With the addition of production from the Lower Khufai, we have shown
that the Blocks hold massive potential for growth. The Buah overlays the
Khufai and both reservoirs are present in large parts at least of the
eastern area of the Blocks.

As exploration and appraisal continues in 2016 within and close to the
producing areas in all three fields, we have every reason to believe
that much more oil can be found. With the successful bringing on stream
of the new reservoir within the Shahd field, a water injection programme
in the Buah layer showing signs of working combined with a steady
production on Farha South field, we also believe that production will
continue to increase during 2016. As the production from the new
reservoirs is optimized, the production for individual months will
fluctuate, and possibly show more volatility than during 2015. And
commencing in April, planned maintenance work at first in Farha South
and then in Shahd will lead to temporary production disruption. Our
focus on cash flow will continue, and the work programme will be
continually monitored to stay optimized in relation to oil prices.

Our balance sheet remains one of the strongest of our peer group and as
the oil price has fallen further, our relative strength has increased.
There is a lot of opportunity out there. We are well positioned and are
continuously evaluating new projects. We continue to be a cash dividend
company, and propose a dividend of SEK 1 per share. Depending on how oil
prices, production levels investments and other events unfold we will
continually evaluate the sense in distributing more cash to shareholders
in accordance with our long term financial goals.

So stay with us, we expect that Tethys will produce a fair amount of
oil, at least in relativity terms, but most likely not enough to
influence the international oil price.


Stockholm in February 2016



Managing director



Conference call

Date: Tuesday, 9 February 2016

Time: 10.00 CET


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


To participate via phone, please call:

Sweden: +46 8 505 564 74

Switzerland: +41 225 675 541

UK: +44 203 364 5374

North America: +1 855 753 2230


To participate via web:

Länk till webbsändningen:


For further information, please contact:  

Magnus Nordin, managing director, phone: +46 8 505 947 00

Morgan Sadarangani, CFO, phone: +46 8 505 947 00

About Tethys Oil

Tethys Oil is a Swedish oil company with focus on onshore areas with known oil discoveries. The company’s core area is the Sultanate of Oman, where it holds interests in Blocks 3&4, Block 49, Block 56 and Block 58. Tethys Oil has net working interest 2P reserves of 26.1 mmbo and net working interest 2C Contingent Resources of 13.5 mmbo and had an average oil production of 12,832 barrels per day from Blocks 3&4 during 2019. The company’s shares are listed on Nasdaq Stockholm (TETY). Website: