TPL Tethys

 
TIDMTPL 
 
Tethys Petroleum Press Release: Update on Claims Made Against the Company and its Employees in Kazakhstan 
FOR:  TETHYS PETROLEUM LIMITED 
 
TSX, LSE SYMBOL:  TPL 
 
November 7, 2016 
 
Tethys Petroleum Press Release: Update on Claims Made Against the Company and its Employees in Kazakhstan 
 
GRAND CAYMAN, CAYMAN ISLANDS--(Marketwired - Nov. 7, 2016) - Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) 
("Tethys" or the "Company") today provides an update to the previously announced failure by Olisol Petroleum 
Limited and Olisol Investments Limited (together "Olisol") to fulfill their obligations under the Investment 
Agreement, claims made against Tethys subsidiaries in Kazakhstan by Eurasia Gas Group LLP ("EGG") and other 
claims made against Tethys subsidiaries and employees. 
 
Mr. Alexander Skripka is a principal of both Olisol and EGG and the Company's former Chief Commercial Officer 
and Deputy General Director in Kazakhstan. Mr. Alexander Abramov is also a principal of Olisol and former 
Chairman of the Company. As previously announced, Mr. Abramov was removed as a director of the Company on 
November 3, 2016 by a majority vote of the Board and in accordance with its Articles of Association. 
 
Investment Agreement with Olisol 
 
On April 28, 2016 Tethys and Olisol signed an investment agreement under which Olisol, a company controlled by 
three Kazakhstan citizens including Mr. Skripka and Mr. Abramov, undertook by October 27, 2016 to provide 
equity investments to Tethys in the amount of CDN$9.8 million and also extended a working capital loan in the 
amount of US$5.7 million which Olisol could convert into additional shares ("Investment Agreement"). It was 
expected that Olisol would acquire at least 42% of the ordinary shares of Tethys and become a good in-country 
partner for Tethys in Kazakhstan. 
 
Olisol did not perform its financing obligations under the Investment Agreement. 
 
Prior to the anticipated closing date of the Investment Agreement Intergas Central Asia ("ICA"), the only buyer 
of the Company's gas in Kazakhstan, unexpectedly notified the Company's subsidiary Tethys Aral Gas LLP ("TAG") 
that it would no longer take gas produced by TAG and was cancelling its gas sales contract with TAG. 
 
Although the termination of the contract by ICA is questionable, as no grounds for termination were given and 
the Company disagrees with ICA's right to terminate the contract, Olisol alleges that there has been a material 
adverse change in the Company's business which gives it the right to terminate the Investment Agreement and to 
demand immediate repayment of its loan. 
 
As announced on November 1, 2016 the Company continues to be in discussions with ICA and Governmental 
officials, and believes that there remains a reasonable prospect that ICA will reinstate the gas contract. 
 
Further, the Company does not believe that the loss of the gas sales to date have been material to the Company 
or that Olisol has the right to terminate the Investment Agreement or that the loan is repayable, as the 
conditions for repayment under the contract have not been met. Olisol is obliged under the legally binding 
terms of the Investment Agreement to continue to provide Tethys with amounts reasonably requested by Tethys, to 
fund working capital requirements during the period ending on the latest of (i) the completion of the TAG Loan 
and (ii) the occurrence of the Closing Date. Olisol undertook to work with Tethys and a Kazakh bank to obtain a 
bank loan of not less than US$10 million for TAG ("TAG Loan") and to date Olisol has not been able to complete 
the TAG Loan. 
 
Disputes with Eurasia Gas Group 
 
EGG is the sole buyer of oil produced by TAG. In 2012, EGG secured loan funding for TAG through a loan in its 
own name through RBK Bank JSC with Tethys assets securing this EGG loan and Tethys responsible to EGG for the 
loan. This was provided to TAG as a prepayment for crude oil to be delivered in future and with a commitment by 
Tethys that all oil would be sold to EGG as long as the loan was outstanding. To all intents and purposes this 
is a secured, interest bearing loan for TAG, with a fixed interest rate and repayment schedule. 
 
EGG has not paid in full for oil purchases from TAG for more than 10 months. More than US$1.4 million is now 
owed by EGG and, after exhausting other efforts to secure payment, TAG wrote to EGG on October 13, 2016 
demanding repayment within 10 days or that it would be forced to take court action to recover the amounts owed 
by EGG. 
 
On October 26, 2016 the Company was notified of a claim lodged by EGG in the Almaty City Court against TAG. EGG 
is seeking an award equivalent to US$2.6 million for the alleged failure by TAG to deliver certain minimum 
volumes of crude oil to EGG. The Company's view is that the claim is without merit or substance as TAG has no 
contractual obligation to deliver minimum volumes of crude oil to EGG, nor is there any penalty clause in 
contracts entered into between TAG and EGG for failure to deliver minimum volumes of crude oil. 
 
Despite the Company only being notified of the claim on October 26, 2016 the Statement of Claim was filed on 
October 21, 2016 and on October 24, 2016 the Judge issued a freezing order on the bank accounts, production 
assets, shares and subsoil use contracts of TAG. 
 
We have serious concerns about these actions as the lawsuit was accepted by the Court in breach of the 
statutory pre-trial dispute resolution procedure which requires a 30 day negotiation period prior to filing a 
lawsuit. 
 
The Judge's ruling also prohibited general meetings of the shareholders of TAG and the management of the 
company was prohibited from issuing certain resolutions and orders. In other words, the management of TAG is 
restricted from performing some of its functions according to its Charter. The freezing order was imposed on 
all bank accounts, and the company is unable to pay salaries to employees, suppliers or taxes due to Government 
authorities until the accounts are unblocked. It is also unable to receive payment of the more than US$3 
million owed by ICA for gas sales and the US$1.4 million owed by EGG for oil sales. 
 
A Court hearing date was set for November 1, 2016, however, EGG's legal representatives failed to appear and 
the hearing was delayed for a week. 
 
Criminal case against Tethys Aral Gas LLP and allegations against its employees. Searches and seizures at the 
office of Tethys Aral Gas LLP, Tethys Services Kazakhstan LLP and Kul-Bas LLP 
 
On November 1, 2016 a judge of a regional court of Almaty issued a resolution to execute searches at the office 
of TAG as a result of a criminal case against TAG and its employees alleging theft. We understand that the case 
was initiated by Mr. Abramov. On November 2, 2016 the investigation division of the Internal Affairs Department 
of Almaty conducted searches of the Company's offices. 
 
We are informed by legal counsel in Kazakhstan that a freezing order of the sort described above imposed by a 
special inter-district economic court of Almaty in a simple civil case is quite unusual and that the 
involvement of armed law enforcement authorities to quickly conduct investigations in a case of this nature is 
highly unusual. 
 
As a result of the searches and seizures, accounting documents, contracts, computers and servers of TAG were 
seized. Moreover, documents, computers and servers of Tethys Services Kazakhstan LLP and Kul-Bas LLP, companies 
affiliated with TAG, were also seized. 
 
Furthermore, members of TAG management were required to attend interrogation on November 4, 2016 and this 
process is ongoing. The Company is concerned that if the management of TAG is arrested, TAG risks being 
deprived of its management. 
 
We are concerned that the actions described above may deprive the Company of control over TAG, Tethys Services 
Kazakhstan LLP and Kul-Bas LLP. 
 
Tethys, as the sole shareholder of TAG, Tethys Services Kazakhstan LLP and Kul-Bas LLP, will seek to protect 
its rights and legitimate interests through all legal means and will incur all commercially reasonable legal 
fees and expenses necessary to protect its investment, its management and employees from what it believes to be 
improper allegations. 
 
Tethys will also take all reasonable steps at its disposal to return to normal business operations at the 
earliest time. 
 
Tethys in Kazakhstan employs 280 personnel and the Company has invested circa. US$250 million in the Kazakhstan 
economy since it began its operations in Kazakhstan. The company has also paid over KZT7.4 billion in taxes. 
 
Over recent years the President and the Government of Kazakhstan, the Chairman of the Supreme Court, the 
General Prosecutor and ministers have declared the country's desire to improve the investment attractiveness of 
Kazakhstan and guarantee the supremacy of law and protection of proprietary rights. Based on these 
declarations, Tethys invested in the economy of Kazakhstan and is extremely concerned about the ongoing events 
described above. 
 
The Company is preparing to appeal to the Head of the Executive Office of the President of the Republic of 
Kazakhstan, the General Prosecutor and other Kazakh Governmental agencies, foreign embassies and trade 
associations requesting their assistance and intervention to help resolve these issues. 
 
About Tethys 
 
Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region. 
This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential 
exists in both exploration and in discovered deposits. 
 
Disclaimer 
 
Some of the statements in this document are forward-looking. Forward-looking statements include statements 
regarding the intent, belief and current expectations of the Company or its officers with respect to the 
potential that exists in both exploration and in discovered deposits in Central Asia and the Caspian Region, 
reinstatement of the gas sales contract and resolution of the claims against the Company and its employees in 

Kazakhstan. When used in this document, the words "expects," "believes," "anticipates," "plans," "may," "will," 
"should" and similar expressions, and the negatives thereof, are intended to identify forward-looking 
statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that 
could cause actual outcomes to differ materially from those suggested by any such statements including risks 
and uncertainties with respect to the potential that exists in both exploration and in discovered deposits in 
Central Asia, reinstatement of the gas sales contract and resolution of the claims against the Company and its 
employees in Kazakhstan, and the risk that the Company's Kazakhstan subsidiaries may not be able to satisfy 
their obligations as they become due until such time as the freeze order has been lifted and payment for past 
gas sales has been received. 
 
No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to 
invest in the Company or any other entity, and shareholders of the Company are cautioned not to place undue 
reliance on the forward-looking statements. Save as required by the Listing Rules and applicable law, the 
Company does not undertake to update or change any forward-looking statements to reflect events occurring after 
the date of this announcement. 
 
 
-30- 
 
FOR FURTHER INFORMATION PLEASE CONTACT: 
 
Tethys Petroleum 
info@tethyspetroleum.com 
www.tethyspetroleum.com 
 
 
Tethys Petroleum Limited 
 

(END) Dow Jones Newswires

November 07, 2016 02:05 ET (07:05 GMT)

Tethys (LSE:TPL)
Gráfica de Acción Histórica
De Oct 2024 a Nov 2024

Tethys (LSE:TPL)
Gráfica de Acción Histórica
De Nov 2023 a Nov 2024