DUSHANBE, October 20, 2015, Asia-Plus -- Tethys Petroleum Limited (Tethys or the Company) says it on October14 received a Notice of Events of Default from Nostrum Oil & Gas PLC (Nostrum) in connection with the US$5 million facility agreement between Tethys and Nostrum, dated August 10, 2015 (the Facility Agreement).

Tethys notes in its statement that it does not agree with Nostrum''s interpretation of the Facility Agreement that an event of default has occurred, has submitted a rebuttal of the notification received and has reserved all its rights.

Nostrum has indicated that its interpretation is due to the announcement on October 12, 2015 that Tethys had received a notice from CNPC Central Asia B.V. and Total E&P Tajikistan B.V. requiring that Tethys'' subsidiary, Kulob Petroleum Limited withdraw from the Joint Operating Agreement in Tajikistan and the underlying PSC.

Tethys continues to work with interested parties to conclude a financing transaction as soon as possible and anticipates providing an update on this shortly, the statement released by Tethys on October 14 says.

Tethys and Nostrum last month entered into a non-binding and indicative letter of intent (LOI) setting out proposed terms upon which Nostrum would acquire the entire issued and to be issued share capital of Tethys (the Proposed Offer).

In connection with the Proposed Offer, Nostrum also proposed the terms of a potential interim financing facility of up to US$20 million (the Interim Financing) to fund the Company’s cash requirements from the date of the execution of key transaction documents through until the date of completion of any formal offer.

Conditions of the Proposed Offer, amongst others, included the following: receipt of all necessary and relevant governmental and joint venture partner consents in Kazakhstan, Tajikistan and Georgia; certain additional customary conditions as to the status of the business and financial condition of Tethys up until completion of the Proposed Offer; the receipt of irrevocable undertakings from each director of Tethys to accept a formal offer (on the terms above) in respect of each of the Tethys shares in which they are beneficially interested; receipt of support for the Proposed Offer from the three major shareholders of Tethys in form and substance satisfactory to Nostrum; the receipt of acceptances in respect of 75% of the Tethys shares to which the Proposed Offer relates, or such lower threshold above 50% as Nostrum may determine; and other customary conditions.

Meanwhile, Tethys on October 11 received a notice to withdraw from the Joint Operating Agreement and Shareholders Agreement dated June 18, 2013 relating to the Bokhtar PSC in Tajikistan (the "JOA") and the underlying PSC (the Contract) from CNPC Central Asia B.V. (CNPC) and Total E&P Tajikistan B.V. (Total).

The notice of withdrawal was served on the basis that Tethys has not made the payment on October 9, 2015 for the September Cash Call (approximately US$1.28 Million) issued by the Bokhtar Operating Company.  Tethys has also not made payment for the October 2015 Cash Call (approximately US$0.78 million).  Pursuant to the notice of withdrawal, Total and CNPC state that they jointly require Tethys'' subsidiary, Kulob Petroleum Limited to completely withdraw from the JOA and assign all of its participating interests derived from the Contract and the JOA to Total and CNPC in proportion to their respective participating interests.

Tethys Petroleum Limited is an oil and gas exploration and production company currently focused on Central Asia and the Caspian Region with projects in Kazakhstan, Tajikistan and Georgia.  This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

Kulob Petroleum Limited, a Tajikistan-based wholly-owned subsidiary of Tethys, in July 2013 signed a farm-out agreement (FOA) for the Bokhtar PSC in Tajikistan with subsidiaries of Total S.A. (Total) and the China National Oil and Gas Exploration and Development Corporation (CNODC).

Singed in 2008, the 25-year Bokhtar PSC reportedly covers a total area of approximately 35,000 square kilometers in the Afghan Tajik portion of the prolific Amu Darya basin west of the Pamir mountains.  The area included in the PSC is in the south-western part of Tajikistan and is a large, highly prospective region which has existing oil and gas discoveries but which has seen limited exploration to date.