Presentation

Tethys Oil is a Swedish E&P company focused on areas with known oil and gas discoveries that have not been properly appraised using modern technology. Tethys has interests primarily in Oman and also a minor license interest in Lithuania. The company was formed in 2001 and is listed on the Stockholm Stock Exchange with a market cap of USD 260m.

Over the past decade the Tethys Oil story has become increasingly a story of its prolific Block 3&4 in Oman. As a result of successful exploration, appraisal and production drilling, net production from the block has reached ~12,000 bbl/day. The main producing fields on the block are Farha South, Saiwan East and Shahd, which are continuously being expanded by near-field exploration and appraisal wells. The block is operated by CC Energy Development, which is applying a production and cash flow-focused approach to drilling, as opposed to committing capital to a comprehensive appraisal program. The relatively low-cost production growth in Oman has enabled Tethys Oil to accumulate cash in recent years, with cash also being distributed to shareholders both as ordinary dividends and extraordinary distributions – rare for a small E&P company. While production in Oman currently is subject to a cap under the OPEC+ output deal, we expect a return to production growth when we expect the cap to be lifted. In 2020, Tethys Oil entered a farm.out agreement with US oil company EOG Resources for 50% of the block. Also in 2020, Tethys expanded into two other exploration and appraisal blocks in Oman, namely Block 56 and Block 58.

As a result, Tethys Oil now holds a portfolio consisting of relatively low-cost and low-risk production which has yielded solid growth in production and revenue in recent years. In addition, the company has distributed cash to shareholders since 2015 and continued to do so all through the oil price downturns of 2016 and 2020, a testament to the operational and financial resilience of the company.