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Tethys Petroleum receives 15-year contract extension in Kazakhstan as gas drilling surges

23rd May 2014

Tethys Petroleum Limited has announced that the Kazakh State Reserves Committee has approved the company's gas reserve evaluation for the Kyzyloi production contract area

Tethys Petroleum receives 15-year contract extension in Kazakhstan as gas drilling operations surge
The contract area covers some 287 square kilometres, with Tethys currently producing gas from shallow Kyzyloi sandstone plays

This approval is a precursor to a further contract extension of 15 years, subject to confirmation by the Kazakh oil and gas ministry

The contract area covers some 287 square kilometres, with Tethys currently producing gas from shallow Kyzyloi sandstone plays in the area. This an extension will give Tethys significantly more time to produce natural gas from this attractive area.

Work is also continuing on its shallow gas exploration and development programme in the surrounding Akkulka area. Drilling operations on the AKK20 well have commenced. This is the fourth exploration well of the 2014 shallow gas programme and is targeting gas at two shallow gas horizons, both the Kyzyloi sand and, at the deeper, higher pressured Tasaran sand level.

Testing of the AKK17, AKK18 and AKK19 wells will commence in early June with AKK20 to follow on should the logs indicate success and this is expected to take a combined 6 - 8 weeks. Following testing, State reserves will be obtained for these deposits and these wells will be tied into the existing infrastructure along with AKK05, AKK15 and AKK16. The order for gas dehydration equipment has now been placed, with the aim of commencing significantly increased gas production from the beginning of 2015.

Steve Elliott, vice president of project development for Tethys commented: "Obtaining updated state reserves for Kyzyloi places us on track to secure a long extension to the Kyzyloi gas field production period. The programme on Akkulka continues apace, with new wells being drilled, testing and tie-ins planned for this summer, and with important facilities such as the gas dehydration equipment now moving forward. Our project team is focused on meeting the objective of tripling gas production by the beginning of next year and our commercial negotiators are working on achieving significant increases in gas prices, all of which should add significantly to cash flow from the project in 2015."

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan, Tajikistan and Georgia. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

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