The drilling location in Karlebo, onshore Zealand is now complete. The location is 5,000 square metres and includes a complete closed drainage system to handle rain water.

The drilling pad which was reinforced with sixty seven 10 meter piles and is designed to handle a drilling load of over 615,000 kilograms. A total of 100 trucks carrying a total of 3,200 cubic metres of gravel and 50 trucks carrying 600 cubic metres of asphalt were required to be moved onto the location to construct the drill site. A 12 metre 20 inches conductor pipe has been pre-driven to accommodate the first string of casing.

Mobilization of the drilling equipment will commence next week when the first out of 45 drilling rig loads are expected to arrive from Klaipeda, Lithuania. Spud of Karlebo-1 is expected once mobilization is completed sometime between the 15th and 30th of September.

License 1/02 was awarded by the Danish government during the summer of 2002. Tethys Oil is the operator of the licenses with 50 percent interest.

Oman

Work on Block 15 is progressing well. The consortium consisting of Tethys wholly owned subsidiary GotOil Resources (Oman) Limited as Operator with 40 per cent interest and Odin Energi A/S recently received permission to drill on Block 15 from the Ministry of Regional Municipalities, Environment and Regional Water Resources. The drilling application along with an Environmental Impact Assessment was completed and submitted to the relevant authorities in June.

Preparations to re-enter the two discovery wells on Block 15 can now in earnest gather momentum. Tendering for a drilling rig and associated services has commenced and it is planned to re-enter both wells with a view to production test the Natih reservoir before the year end.

Simultaneous to the re-entry preparations, geological and geophysical work is also gathering pace. Work is ongoing to re-map the Jebel Aswad and Wadi Saylah structures. Further work includes re-processing of existing seismic and re-interpreting over 2500 kilometres of 2D seismic to firm up additional drilling prospects.