Tethys Petroleum Limited today announces that Great Wall Drilling Company was the winner of a tender for a ten well shallow gas well drilling program. Tethys now has ten (10) days to sign a contract with Great Wall, the cost of which drilling is expected to be approximately $6 million USD. The Company will have until the end of 2018 fiscal year to pay these costs and expects to be able to pay from increased production. Following mobilization, the Company hopes to begin drilling on or about May 1, 2017. Additionally, the Company will work over three existing wells and tie in two wells drilled but not tied into production. This program is designed to add twelve (12) or more new wells to existing production.
The Company also announces the signing of a lease contract with MSI to build and install a mini-compressor in Bozoi. Installation is expected during the July 2017 time period. This is new technology for Central Asia and is intended to enhance gas production prior to the new wells being tied in. After new production is tied in, then the mini-compressor will be used on older wells to extend the life of wells.
While the Company will continue to reduce operational costs, our focus this year is increasing production of both oil and gas. Additionally, we will seek to enhance pricing. Until these goals can be achieved, Tethys will continue to experience a cash flow problem and a need for funding.
The Company has received approval of the needed lenders to extend the $3.5 million loan that is secured by the drilling rigs of the Company by 18 months to August 2018. Additionally, the Company is in discussions with both Khan Energy and AGR Energy to extend the indebtedness owed to each of them which is currently due in March and June 2017 respectively.