MUSD (unless specifically stated) Second First Second
quarter quarter quarter
2019  2019  2018 
Net daily production from Oman, 12,881  11,901  11,733 
Blocks 3&4 before government take
(bbl)
Net barrels produced, after 609,523  556,967  555,201 
government take (bbl)
Net barrels sold, after government 561,077  613,752  529,194 
take (bbl)
  
Average selling price per barrel, 67.8  61.6  65.6 
USD
  
Revenue and other income 41.3  32.7 36.4 
EBITDA 27.9  17.2 24.3 
Operating result 16.4  5.6 12.9 
Result for the period 17.3  6.4 15.0 
Earnings per share (after 0.51  0.19 0.44 
dilution), USD
  
Net cash 62.0  82.7  35.8 
Investments in oil and gas 12.8  11.6  13.2 
properties

MUSD (unless specifically stated) First half First  half Full
 2019   2018  year
2018 
Net daily production from Oman, 12,394  11,654 11,767 
Blocks 3&4 before government take
(bbl)
Net barrels produced, after 1,166,490   1,096,887   2,233,323 
government take (bbl)
Net barrels sold, after government 1,174,829   1,041,192   2,163,148 
take (bbl)
     
Average selling price per barrel, 64.5  64.6 70.5 
USD
     
Revenue and other income 74.0  70.6 157.3 
EBITDA 44.8  45.7 106.6 
Operating result 22.0  23.1 60.7 
Result for the period 23.7  24.0 62.2 
Earnings per share (after 0.69  0.71  1.82 
dilution), USD
     
Net cash 62.0  35.8 73.1 
Investments in oil and gas 24.4  26.9  55.8 
properties

Letter to shareholders

Dear Friends and Investors,

The second quarter 2019 has been a strong period for Tethys Oil and I am pleased to report that once again our revenue and other income for the quarter has exceeded MUSD 40 and with production increasing and decreased opex from the first quarter all numbers point in the right direction for the quarter. These figures demonstrate the robustness of our core Omani asset, Blocks 3&4, and shows that our prior investment in the asset is bearing fruit. Our exploration activity also continues with a new exploration well recently spudded on Blocks 3&4 whilst concurrently we are maturing a number of leads on Block 49.

Production for the quarter increased to an average daily rate of 12,881 bopd as start-up issues reported in the first quarter 2019 were successfully overcome at the Ulfa field. This is a nine percent increase from the average 2018 production and is a direct result of our investment in the asset over the prior quarters. This has continued as we have recently reported our July average production of 12,819 bopd and we are pleased that we are now firmly at the higher end of our guidance of a net production of 12,000 -13,000 bopd for the year.

The oil price rose steadily during first 5 months of the year but dropped back in early June and is now hovering around the USD 60 per barrel level. Due to our two-month lag in pricing of oil sales these movements will be reflected in our third quarter numbers. In the second quarter our average realised price was USD 67.8 per barrel, an increase of 10 percent compared to the first quarter.

As anticipated in the report for the first quarter 2019, total operating expenses were reduced during the period. This lower cost combined with the increased production resulted in an Opex per barrel of USD 10.2 for the quarter, down from USD 13.3 as reported in the first quarter 2019. With the ongoing field operations to maintain production from the existing well stock we expect that the Opex per barrel for the remainder of the year to be in the region of USD 11.

The increased production levels have yielded strong financial results for the quarter. We report revenues and other income of MUSD 41.3, up 26 percent from the first quarter 2019. Our EBITDA amounted to MUSD 27.9, up 62 percent compared with the first quarter 2019. During the quarter, cash flow from operations before adjustments for working capital amounted to MUSD 22.0 and investments in oil and gas amounted to MUSD 12.8. Following our record distribution of MUSD 24.9 to our shareholders in the quarter, our net cash position resulted in a balance of MUSD 62.0. The net result for the period amounted to MUSD 17.3, up 170 percent compared with the first quarter 2019.

On the exploration side of the business, we continue to mature and high-grade our substantial lead inventory in Block 3&4 while eagerly awaiting the results from the Yusr-1 well, which is currently in progress. Yusr-1 is the first exploration well to be drilled in the recently acquired 3D seismic area located to the north of Farha South. In addition, at least two more exploration wells are planned for the year in Blocks 3&4.

On Block 49, our seismic interpretation and prospect mapping continues at a pace and we are now roughly three quarters through the data set that we acquired late last year. The geological work is focused on defining, risking and maturing leads into drillable prospects whilst concurrently we have begun preparations for exploration drilling. We expect to provide further details on the geological work and our drilling plans in the coming months.

Our strong cash position and cash flow have enabled us to continue with shareholder distributions through our recent share repurchases, following our cash distributions to shareholders in May and June. Our cash position also provides us with a sizable war chest that enables us to add additional assets, as and when we find any that meet our rigorous technical and commercial criteria, and enable us to maintain our strong financial discipline.

So stay tuned - our journey of growth continues!

Stockholm, 13th August 2019

Magnus Nordin
Managing Director

For further information, please contact:
Magnus Nordin, Managing Director, phone: +46 8 505 947 00
William Holland, CFO, phone: +46 8 505 947 00

Conference call

Date: 13 August 2019
Time: 10.00 CET

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

Link to webcast: https://edge.media-server.com/mmc/p/o3yrsi3e

To participate via phone, please call:
Sweden: +46 8 566 426 51 / PIN: 20391517#
Switzerland: +41 225 809 034 / PIN: 20391517#
UK: +44 333 300 0804 PIN: 20391517#
United States (Toll-Free): +1 855 857 0686 PIN: 20391517#

This information is information that Tethys Oil AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, at 7:30 CET on 13 August 2019.