Tethys Petroleum makes move into Georgia

Tethys Petroleum (LON:TPL) (TSE:TPL) has expanded its business interests with acquisitions in Georgia.

The explorer, which has focussed on central Asia, said it will acquire stakes in a total of five production sharing contracts through two separate deals.

In one deal, it will get 56% of licence blocks XIA, XIM and XIN, with the area to be called Project Iberia, while the other deal gives Tethys full ownership of blocks VIII and XIG, which will be known as Project Tamar.

Together, the licences span around 6,400 square kilometres. Tethys believes the areas are prospective for both conventional and unconventional hydrocarbons.

"We are excited to acquire these world class assets with significant potential for conventional and non-conventional oil and gas production,” said chairman David Robson.

“This strategic move into Georgia, a country with a very good business climate and good operating environment, as operator with a substantial acreage position and existing strong local partners is a very attractive opportunity.

“The independent evaluation carried out suggests potential of several billion barrels of oil in this acreage with direct access to world markets and very attractive commercial terms. These transactions significantly strengthen Tethys' diversified portfolio adding to our projects in Central Asia and allowing us to continue to deliver shareholder value."

For Project Iberia, Tethys is paying US$9.6 million and a US$4.4 million carry on future work. This area is currently estimated to have recoverable prospective resources of over 3.2 billion barrels of oil equivalent, based on 34.8 billion barrels ‘in-place’.

No such estimates have yet been made for Project Tamar, which is being acquired for US$6.4 million. 

The consideration for both acquisitions will be met by issuing new shares.

Tethys also said there was potential for an asset swap deal with the other partners in Project Iberia, whereby it could swap additional project equity in exchange for interests in Project Tamar.

The news comes just a mere few weeks after the company wrapped up its farm-out deal with French major Total and China National Petroleum Corp (CNPC) in Tajikistan, with the block having more potential than the entire UK North Sea, according to Robson. Under the terms of that farm-out deal, Total and CNPC each now own a one-third stake in the Bokhtar venture, in Tajikistan, while Tethys’s 85% owned Kulob Petroleum subsidiary has the other third. The Tajik authorities also awarded the partners new acreage - a further 1,186 square kilometres - in the area, with the initial period under the production sharing contract extended until 2020.