FOURTH QUARTER 2013 • 21 per cent increase in production from Oman and Lithuania compared to fourth quarter 2012. Production from Oman and Lithuania amounted to 499,028 barrels corresponding to 5,424 barrels per day • Year-end audited reserves Block 3&4 Oman net to Tethys: a) 1P reserves 10.8 million barrels (5.3) b) 2P reserves 15.2 million barrels (14.3) c) 3P reserves 20.0 million barrels (18.7) • Second appraisal well in the Lower Buah layer on the B4EW4 structure flows in excess of 2,000 barrels per day • Record flow rates from third appraisal well - flows in excess of 3,000 barrels per day • Record net sales of MSEK 193 (170) • EBITDA of MSEK 148 (177). The comparative figure includes one-off effects relating to non-operational items • Net result after tax MSEK 45 (145). The result has been further impacted negatively by exploration costs amounting to MSEK 56 (5) related primarily to Block 15 onshore Oman • Earnings per share before and after dilution of SEK 1.26 (4.07) TWELVE MONTHS 2013 • 22 per cent increase in production from Oman and Lithuania compared to 2012. Production from Oman and Lithuania amounted to 1,709,706 barrels ·Net sales of MSEK 592 (584) • Net result after tax MSEK 240 (314) • Earnings per share before and after dilution of SEK 6.76 (9.11) SUBSEQUENT EVENTS • New oil discovery onshore Oman – Exploration well B4EW6 encounters oil, testing in progress • Fourth appraisal well in the Lower Buah layer on the B4EW4 structure drilling • Capex budget 2014 for Blocks 3&4 amounts to MUSD 60 (approximately MSEK 400) • Tethys Oil’s share of production from Oman during January 2014 amounted to 198,954 barrels corresponding to 6,418 barrels per day (For table, please see attached file) Dear Friends and Investors 2013 was another successful year for Tethys Oil. We increased our production from Blocks 3 and 4 onshore Oman by 24 per cent to 1.7 million barrels of oil, corresponding to 4,556 barrels of oil per day (“bopd”) (1.3 million barrels and 3,677 bopd in 2012). The trend continued throughout 2013 with a substantial increase in December bringing average daily production above 6,000 bopd. Compared to December 2012, Block 3 and 4 production increased by 40 per cent from 4,420 bopd to 6,203 bopd. Financially, 2013 revenues increased to MSEK 592 (MSEK 584), while EBITDA fell back a little to MSEK 479 (MSEK 509) primarily due to timing related issues and slightly higher opex associated with well work overs at the Farha South oil field. The result for the full year stands at MSEK 240 (MSEK 314). 2013 ends with record production and record net sales during the fourth quarter and a healthy EBITDA margin of 77 per cent of revenues paling only in comparison with fourth quarter 2012 where the EBITDA margin was more than 100 per cent of revenues, following certain non-operational one off items. The average oil prices remained high at USD 107 per barrel in 2013, slightly lower than in 2012 (USD 110 per barrel). The production increase is primarily a result of the successful exploration and appraisal work associated with the B4EW4 discovery on Block 4. The producing Lower Buah reservoir has so far exceeded our expectations and is rapidly turning in to our best producing reservoir. However, the water injection programme on Farha South and infill production drilling both in the Barik fault blocks of the Farha South field as well as in the Khufai layer of the Saiwan East field have also contributed. All in all 35 wells were drilled in 2013. And 2014 is off to an promising start. Today we have the pleasure of announcing a new discovery in the B4EW6 structure. Testing operations of the Lower Buah are in progress. This structure looks very similar to B4EW4, and we are hopeful results will also be similar. The year-end reserve report for Blocks 3 and 4 presents a very strong base case. Our 1P reserves from the producing Barik, Khufai and Lower Buah reservoirs stand at 10 million barrels (mmbo), 2P at 15 mmbo and 3P at 20 mmbo. The 2P reserve replacement ratio is a healthy 153 per cent. The 1P reserves have more than doubled, primarily following the successful water injection program in the Barik reservoir of the Farah South Field. The 2P number increased by 21 per cent which is less than we had expected, but this is due to the ‘work in progress’ nature of the appraisal drilling ongoing on the B4EW4 structure. As per 31 December 2013, this structure holds 2P reserves of 2.3 mmbo and 3P reserves of 3.9 mmbo. We believe however that the 2P number will move closer to the 3P number as appraisal drilling continues. We believe there is a strong chance that the current appraisal well B4EW4-7 should be a significant step in that direction. So far, we have only explored about ten percent of the total area of the Blocks. All of our reserves and production comes from this fraction of our licence. A large part of the exploration programme in 2013 focused on seismic studies. We acquired 1,671 square kilometres of 3D seismic and 850 square kilometres of 2D seismic. The studies have resulted in the mapping of a large number of new prospects, and if the drill bit confirms these prospects to be commercial oil fields, we will be in a position to multiply Tethys’ reserves over the next couple of years. But before we get completely carried away by Blocks 3 and 4, let us say a few words about our other projects. In Lithuania, production continues from the Gargzdai licence as well as exploration/appraisal drilling on the Rietavas licence. Both licences have interesting upside, but we do not expect any conclusive results in the near term. Our Lithuanian eastern most licence Raiseiniai show more of a fast track. A 3D seismic study was completed in December 2013 and is currently being interpreted. Preliminary data suggests the presence of both potentially oil bearing reefal structures as well as potentially oil bearing fracture zones in the carbonate matrix. Interpretation continues, and we hope to be able to give more details early in the second quarter. And while we are in the Baltic region, let us revisit our project on Gotland – for the last time. It is not without regret but we have decided to not renew our Swedish licenses. In light of our success in Oman and the large potential in our non-Swedish areas of operation, Gotland has simply become too small to warrant further work. The same, unfortunately, goes for another of our early projects, the Jebel Aswad discovery on Block 15. The long term production test carried out during the second half of 2013 did not yield the results we were hoping for. We must therefore conclude that the Jebel Aswad discovery is too small to warrant further investments and we do not expect further work to be carried out in this area of Block 15. We will however continue to evaluate other leads on the Block. So, let us get back to Blocks 3 and 4 and look forward. The budget for 2014 calls for CAPEX net to Tethys of MUSD 60 (or almost MSEK 400). About 60 per cent will be spent on continued development, including the final phase of the Farha South water injection programme and the drilling of additional production wells in all three producing areas. The number 4 area (B4EW4) on Block 4 is planned to be connected to the processing plant at Saiwan East, and facilities will be continually upgraded to handle increased production. Exploration and appraisal efforts will continue in 2014. Seismic acquisition was an important part of the 2013 explorations programme. Exploration drilling will be more in focus during 2014. The seismic data acquired last year will be very important in guiding the drill bit in 2014. Broadly speaking from an exploration view point 2014 can be divided into several separate project areas. Barik exploration along the Farha trend will continue. Wells are planned in undrilled fault blocks near the producing Farha South field but also in the extension mapped on last year’s 3D seismic. If the wells drilled in the South Farha South area, as the new area is provisionally called, are successful, it will be strong indication that the Farha trend extends into the south outside the currently producing area. Drilling activity will be high in the “Lower Buah area” on Block 4, with continued appraisal in area 4 (B4EW4). We also expect several newly mapped similar structures to be tested by the drill bit during the year. Maybe the most exciting wells will be the once planned to be drilled in the Masira Graben area in the eastern part of Block 4. This is a previous undrilled area and the 2D seismic acquired during 2013 suggest the presence of several leads and prospects in a multitude of different reservoir environments. However, with no nearby well data to correlate the seismic interpretation, uncertainty remains high and the results from the first exploration well will be very interesting in order to determine the prospectivity of this large Block 4 area. We plan to spud the first Masira Graben exploration well before summer. Exploration wells are also planned to be drilled in areas where previous operators have reported oil shows and at least one well within the 3D area covering the western part of Block 4. It is always difficult to assign numbers to prospective resources but we have run a number of scenarios in-house and believe that the exploration programme planned for 2014 has the potential to add another 3-20 mmbo net to Tethys from wells to be drilled into new Barik and Lower Buah structures. The exploration wells to be drilled in the Masira Graben area and to test other reservoirs than the known producers, The Barik, the Khufai and the Lower Buah, naturally also have potential but we believe it is still too early to assign resource numbers to these. A completely new pilot programme will also be initiated to better understand the Lower Al Bashir (LAB) reservoir. The LAB has flowed oil both from the Farha South field and the number 4 area on Block 4, but it suffers from a tricky reservoir. If successful, the LAB could turn into a major asset. And on a final note, the seismic crews will also not go completely idle. The work programme contains plans for an additional 1,000 square kilometres of 3D seismic. But now we have said enough, this report speaks for itself and as for 2014? – well, stay with us. We have a very exciting and comprehensive work programme, and although we do not know what will happen, we strongly believe that we have a great possibility to significantly increase both production and reserves. Stockholm in February 2014 Magnus Nordin Managing Director For further information, please contact: Magnus Nordin. Managing Director. phone: +46 8 505 947 02. e-mail:magnus@tethysoil.com or Morgan Sadarangani. CFO. phone +46 8 505 947 01. e-mail:morgan@tethysoil.com