Tethys Petroleum Limited has commenced oil sales under a test production scheme from the Doris oil discovery in Kazakhstan. This is ahead of the scheduled start date of the end of 2010.

Today trucks began transporting first commercial oil from the AKD01 well on the Doris oil discovery on the Akkulka Exploration Contract in Kazakhstan. Initially untreated oil will be sold at the well site to an oil trading company who will transport the oil to the oil processing facility at Emba, located some 450 km to the north-east where it will be treated before being transported to a local refinery. Initial daily production under this early production scheme is planned to be 750 bopd and will be sold at the wellhead at an initial price of $22/barrel for the untreated oil. This test production scheme is being implemented to realise early cash flow and also to prepare for the higher production and associated logistics for the next stage.

The second stage of the oil production scheme is anticipated to commence in the second quarter of 2011 whereby production is planned to increase to 3-4,000 bopd. The increased production should see Tethys source further trucks and begin a bigger trucking operation whereby higher margins will be realised due to processing of the oil at the field and also from more effective transportation.

Julian Hammond, Chief Commercial Officer of Tethys, commented, 'We are very pleased to have implemented the test oil production scheme ahead of schedule and now to be commercialising our Doris oil discovery. This is only an interim stage to realise early cash flow and optimise transportation logistics prior to bringing on stream the higher production rates intended for Q2 2011 and we expect margins to strengthen considerably over the next year as we take further control of the sales marketing chain.'

Tags: Tethys Petroleum Limited