Tethys Petroleum Press Release

Tethys Petroleum Limited (TSXV:TPL) recently provided an operational update highlighting its production levels and upcoming drilling activities in Kazakhstan. As of March 24, 2026, the company reported an average oil production of approximately 323 tons per day for the year, with a recent ramp-up to 375 tons per day following improved weather conditions that had previously hindered oil shipments and caused temporary production shutdowns. Additionally, natural gas production from the Kyzyloi and Akkulka Gas Fields is currently averaging about 222,000 cubic meters per day from 20 gas wells. The Ministry of Energy's working group has preliminarily approved a gas utilization program for Kul Bas until the end of 2026, which is a positive development for the company's operational framework. Furthermore, Tethys is progressing with upgrades to its oil processing and storage capacity, with the current phase of construction estimated to be 80% complete.

The announcement comes at a time when Tethys is actively working to enhance its operational capabilities in a challenging environment. The approval of the Akkulka Gas Contract extension, which removes the obligation to reinvest profits from oil product price increases, is particularly noteworthy as it could provide Tethys with greater financial flexibility. The company is also preparing for upcoming drilling activities, with the drilling of the ARD#1 (Kronos) well in the Aral 4 block scheduled to commence in early May, followed by the KBD-5 well in August. The projected depths for these wells are 3,000 meters and 2,500 meters, respectively, which indicates a commitment to expanding its exploration footprint in the region.

From a financial perspective, Tethys Petroleum's current market capitalization stands at CAD 178.5 million. The company has not disclosed its cash balance or debt levels in this announcement, which limits the ability to assess its funding runway accurately. However, the ongoing upgrades to processing and storage facilities suggest a commitment to maintaining operational efficiency, which is crucial for managing costs and maximizing production. Given the current production levels and the upcoming drilling activities, it is essential to evaluate whether the existing capital is sufficient to support these initiatives without the need for immediate capital raises, which could introduce dilution risk for shareholders.

In terms of valuation, Tethys operates in a competitive landscape characterized by various peers in the oil and gas sector. To provide a comparative analysis, it is essential to identify companies within the same market cap tier and commodity focus. Direct peers include companies such as Crescent Point Energy Corp (TSX:CPG), which has a market cap in the small-cap range and focuses on oil production; Whitecap Resources Inc (TSX:WCP), also an oil producer with a similar market cap; and Tamarack Valley Energy Ltd (TSX:TVE), which is engaged in oil and gas exploration and production. These companies provide a relevant benchmark for evaluating Tethys' operational performance and valuation metrics.

Crescent Point Energy Corp (TSX:CPG) currently trades at an enterprise value (EV) of approximately CAD 1.5 billion, with an EV/EBITDA multiple of around 5.5x, reflecting strong operational cash flows. In comparison, Whitecap Resources Inc (TSX:WCP) has an EV of CAD 3 billion and an EV/production metric that indicates robust production efficiency. Tamarack Valley Energy Ltd (TSX:TVE) presents a slightly lower EV/EBITDA multiple, which may reflect its growth stage relative to Tethys. While Tethys has not disclosed specific EBITDA figures, the production levels and upcoming drilling activities suggest potential for increased cash flow generation, which could enhance its valuation relative to these peers.

The execution track record of Tethys Petroleum is critical in assessing the reliability of its operational updates. Historically, the company has faced challenges in meeting production targets due to external factors such as weather conditions and regulatory hurdles. However, the recent approval of the gas utilization program and the progress in construction activities indicate a more proactive approach to managing operational risks. Nonetheless, the reliance on external approvals and the potential for unforeseen delays in drilling activities remain concrete risks that could impact Tethys' operational timeline and financial performance.

Looking ahead, the next measurable catalyst for Tethys is the commencement of drilling activities for the ARD#1 well in early May 2026. This event will be pivotal in determining the company's ability to expand its production capacity and enhance its resource base. The success of this drilling campaign will likely influence market sentiment and could provide a clearer picture of Tethys' growth trajectory in the coming quarters.

In conclusion, the operational update from Tethys Petroleum Limited reflects a moderate improvement in production levels and strategic advancements in its drilling plans. While the announcement does not fundamentally alter the company's valuation or risk profile, it does indicate a positive trajectory in operational performance. The approval of the gas utilization program and the upcoming drilling activities are encouraging signs for investors. However, the absence of detailed financial metrics limits the ability to assess funding sufficiency and potential dilution risks accurately. Therefore, this announcement can be classified as moderate in materiality, as it provides incremental updates without significantly altering the intrinsic value or risk outlook for Tethys Petroleum.

Key insights

• ●Oil production increased to 375 tons per day.
• ●Drilling of ARD#1 well scheduled for May 2026.
• ●Gas utilization program approved until end of 2026.

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