• Third quarter production increased 17 per cent compared with second quarter 2014. Total production amounted to 772,722 barrels corresponding to 8,399 barrels per day. The increase is mainly due to continued successful appraisal in the Lower Buah (including B4EW4) area and continued implementation of the water injection programme in the Farha South area • Third quarter 2014 net sales of MSEK 296 compared to MSEK 245 in the second quarter 2014, an increase with 21 per cent quarter on quarter. The strong net sales development is primarily based on the production increase during the quarter • Net result after tax during third quarter 2014 amounted to MSEK 167, and is up 56 per cent compared to MSEK 107 during second quarter 2014. Strong sales development and significant reduction of financial expenditures following the transition from net debt to net cash position during the end of the second quarter mainly explain the increase in net result • Third quarter 2014 earnings per share before and after dilution of SEK 4.71 compared to SEK 3.02 during second quarter 2014 • The board of directors has decided to initiate a share repurchase programme ┌───────────────────────────────┬──────────┬───────────┬──────────┬───────────┐ │MSEK (unless specifically │Third │Second │Third │% Q3 2014 │ │stated) │quarter │quarter │quarter │to Q2 2014 │ │ │2013 │2014 │2014 │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Production, before government │442,352 │658,123 │772,722 │17% │ │take (bbl) │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Average daily production, │4,808 │7,232 │8,399 │16% │ │before government take (bbl) │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Net sales, after government │213,397 │350,059 │399,352 │14% │ │take (bbl) │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Average selling price per │102.13 │105.89 │107.57 │2% │ │barrel, USD │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Net sales of oil and gas │142 │245 │296 │21% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Operating result │60 │134 │173 │29% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │EBITDA │96 │192 │232 │21% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Result for the period │52 │107 │167 │56% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Earnings per share before and │1.46 │3.02 │4.71 │56% │ │after dilution, SEK │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Net debt/(net cash) │174 │(3) │(161) │5,267% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Investments │60 │69 │45 │-35% │ └───────────────────────────────┴──────────┴───────────┴──────────┴───────────┘ ┌───────────────────────────────┬──────────┬───────────┬──────────┬───────────┐ │MSEK (unless specifically │Third │Second │Third │% Q3 2014 │ │stated) │quarter │quarter │quarter │to Q2 2014 │ │ │2013 │2014 │2014 │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Production, before government │442,352 │658,123 │772,722 │17% │ │take (bbl) │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Average daily production, │4,808 │7,232 │8,399 │16% │ │before government take (bbl) │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Net sales, after government │213,397 │350,059 │399,352 │14% │ │take (bbl) │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Average selling price per │102.13 │105.89 │107.57 │2% │ │barrel, USD │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Net sales of oil and gas │142 │245 │296 │21% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Operating result │60 │134 │173 │29% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │EBITDA │96 │192 │232 │21% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Result for the period │52 │107 │167 │56% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Earnings per share before and │1.46 │3.02 │4.71 │56% │ │after dilution, SEK │ │ │ │ │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Net debt/(net cash) │174 │(3) │(161) │5,267% │ ├───────────────────────────────┼──────────┼───────────┼──────────┼───────────┤ │Investments │60 │69 │45 │-35% │ └───────────────────────────────┴──────────┴───────────┴──────────┴───────────┘ Dear Friends and Investors We are proud to present another record quarter for Tethys Oil. In the third quarter 2014, we produced more oil than ever before which resulted in quarterly net sales of MSEK 296. Our EBITDA for the quarter amounted to MSEK 232 and our net result for the quarter amounted to MSEK 167. From the second to the third quarter, we have increased our oil production with 16 per cent, and we have been producing above 8,000 bopd every month in the third quarter. The crude production in September marks a new record of 8,404 bopd. The drill bit also continues its work, both in the Lower Buah areas and within the Farha trend. The long awaited LE-1 exploration well has finished drilling and is currently being evaluated. And to complement the drill bit, a major seismic study in the central part of Block 4 is ongoing. So from a company perspective, the third quarter was almost uninteresting steady she goes - more of the same and a new record sales and production. But the world around us did not stay the same. For the first time in years we have seen a significant movement in the oil price. This has not affected us yet, but our sales from December 2014 will be at a lower oil price. Is this a problem? For us no. Of course we will receive less cash with the lower oil price, but even at current oil prices, the company’s focus on conventional and onshore activity yield ample cash flows. Our plans for the development of Block 3 and 4 do not change at these prices. Our record financial position is not only sufficient to continue our work programmes, but also provides room to implement a buyback program. In effect, with almost MSEK 200 cash on hand at the end of the third quarter and an untapped credit line of MUSD 100 - a lower oil price may very well be more of an opportunity than a problem. I will not go as far as to say that we welcome a lower oil price, even temporarily, but it will create opportunities that were not around when prices were higher. So stay with us - the future continues to be promising! Stockholm in November 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 Tethys Oil is a Swedish energy company focused on exploration and production of oil and natural gas. Tethys Oil’s core area is Oman, where the company is one of the largest onshore oil and gas concession holders. Tethys Oil also has exploration and production assets onshore Lithuania and France. The shares are listed on Nasdaq Stockholm (TETY). (for full report, please see attached file)