Tethys Petroleum Limited

Corporate Update - Seite 3

These cost reductions have not affected the progress towards completion of the seismic survey aimed at locating the first deep exploration well planned for this acreage. As well as the reduction in the CAPEX program the joint venture partners have agreed to reduce the running costs of the Bokhtar Operating Company to reflect the lower oil price environment. Initial reductions have been formally agreed and Tethys believes there is room for additional cuts going forward.

US$6 million Loan Financing Closed

The Company confirms that it received funds on time for the recently announced US$6 million loan facility. The warrants associated with this financing have also been issued.

Georgia

The Company has now signed an agreement with its partner, Georgian Oil and Gas ("GOG"), to remove its current funding obligations of approximately US$4 million under the farm-out agreement signed in July 2013, through reducing its interest in these projects. Under the terms of the new agreement Tethys will reduce its interest to 49% (from 56%) and GOG will become Operator on the licences on Blocks XIA, XIM and XIN. In tandem with this, the partners have begun to renegotiate a more efficient new work program with the State in place of the existing work obligations and deadlines.

Kazakhstan

Gas production levels remain on target with the production level recently doubling from 2014 levels to 520mcm/day (18.4 mmcf/day or 3,060 boe/day). Work is about to commence on the AKK14 well, followed by the AKK05 well, with these being planned to be brought on stream in Q2. These additional wells along with compressor optimization are anticipated to further increase the production level above 570 mcm/day.

Following on from the expected fall in realized oil prices for Q1 2015 the Company confirms that it has agreed a sales oil price at the well head of US$13/barrel for January and February 2015. This is in line with similar recently reported realized prices by other Kazakh oil and gas companies. It is expected that these lower prices will continue to the end of the first quarter. These reduced price levels have less impact in the first quarter than other months due to lower forecast production levels as a result of winter weather. The forecast oil production for February and March is 1,130 bopd and 740 bopd respectively. The Company expects production to go back to over 2,000 bopd in May. Also, the Company is currently less reliant on oil sales than in the past due to the increase in gas volumes and pricing in early 2015, a trend the Company expects to continue in the short-term.