Tethys Oil AB (publ)

Good morning, ladies and gentlemen, and thank you for joining us today at Tethys' earnings call for Q1 2024. It's quite an important call today, so let's go straight into the presentation. So what's going on at and with Tethys? Well, actually, quite a lot. Focus and activity levels on our operating blocks are gearing up for major transformative events. While our non-operated blocks three and four, the source of our production and cash flow for more than 10 years, after a continual drop in production, starting to show signs of stabilization, and we are starting to see the effects of the increased investments over years. So we are actually hopeful that we are seeing a more stable regime from three and four, and of course we are not changing any guidelines. There have been some weather events that have affected production in the near term, but the trend from the production side we believe to be stabilizing. But more importantly, I'd like to talk about our operating blocks. So block 56, just to remind you, we are on the eastern side of Oman. Main focus right now geologically is in the eastern flank of the southern Oman salt basin. We've been working as operator for this block for almost three years now. And we are focusing on a few discoveries that we are now trying to bring into development. And we are also working on the exploration potential of the block. Block 58, we are in the final preparations to drill the canoes well. We are targeting a large structure that, if it holds oil, could be quite significant. And block 49, we've actually entered the second exploration phase to be able to properly evaluate both our Thameen I well, but also the overall prospectivity of the Rub al-Khali Basin in this part of Amman. With all these activities and with the performance of III and IV in the background, we are reviewing our portfolio composition and have taken some advice from the eminent investment bank, Jefferies, to assist the board with a strategic review what should be the company's main focus going forward among all the projects we have to choose from. And we've also signed a heads of agreement with the state Algerian state oil company Sonatrac. We have agreed to work towards a signing in BSA over two areas in Algeria, which we believe could be an excellent second country entry for Tethys. It's been a couple of years since we talked about a second country entry, a second leg to stand on. We have a lot ongoing in Oman. We were looking at other places, not really finding something that was all that attractive. But now, having settled on Algeria, we see a lot of geological and technical upside, and we are in fruitful negotiations with SonarTrack. We see how far we can take it. And Box 3 and 4, of course, 8,000 barrels of oil per day for the quarter. revenue of $30 million and an EBITDA of 13. Down from last quarter both from the production perspective and oil price. Oil prices of course are higher in the second quarter and our CFO Petter will guide you through our financial results in detail. So let's move on then to Block 56 and the field development plan, which is in the final stages. So the block is right adjacent to Block 6 and the Medco-operated Careem small fields. Small fields is an internal and the description of the fields that are owned by PDO but operated by third parties. KSF has been in production for a good 10 years and what we are chasing and about to develop in block 56 is really the continuation of the Karim field. We have a number of discoveries on the block. We have the Altumd where we performed an extended well test, which is now at the core of the field development plan. We have the Sahar discovery, which we didn't make, which we have further appraised. And the Minna one well that we drilled earlier this year and continue to test with encouraging results. So the field development plan, we focus on bringing these three discoveries to production. We are looking at a very uncomplicated early production system initially with trucking. In effect, we are starting up again where we shut in the extended well test now about six months ago. In addition, we are busy interpreting seismic first over the eastern flank so as to support the development of Aljumd, Zahra, and Mena, with a number of additional prospects in, shall we say, near-field exploration mode. And then we are also looking at the Tertiary Basin, which is a completely different basin further to the east of the block, where we have a number of prospects, but this is a little bit further down the line on the exploration side. Interpretation is ongoing, but the main focus right now is to have a very clear inspiration strategy also within the field development plan. And we hope to finalize this within the next couple of weeks and submit it to the ministry for approval and for declaration of commerciality over block 56. Excuse me. I should say by far where we put most of our efforts at the moment. And I hope we will be able to share the details of the plan within the near future. Turning to 58, this is much more of an exploration block. No discoveries made, but exploration as exciting and interesting as it comes. This is really the proverbial company maker. Okay, we're a company already, but if this comes in, we will be an even much larger company. We have two areas here, the Fahad area and the South Lahan area. South Lahan has been the focus for additional seismic interpretation and volumetric interpretation. And we recently announced a quite high prospective resource number for the South Lohan area. We are looking at what is, in effect, an analog to the green fields you see to the right of South Lohan. The PDO operated our wheel cluster of fields, which is in production for the better part of 10 years. And South Lohan is a perspective for the same kind of play, carbonate stringers embedded in salt. But our first target is the Canoes I inspiration well. We expect it to spot in June. We are targeting 120 million barrels of unreleased prospective resources, which will make it by far the most high-profile well to be drilled in the mound this year. That preparation is completed, and a rig contract was signed a couple of months ago, and the rig is now being mobilized to the site. Again, we're looking at a carbonate structure. It's actually the same target that we produced from in Blocks 3 and 4, and that was one of the reasons why we took up an interest in Block 58. We see, here we are on the western flank of the Mount Salt Basin, and it's quite underexplored, but we see similarities with what we have on the western side, and the difference being that we have not found anything even remotely as large from a prospect perspective as we have here on Block 58. So clearly it will be quite an exciting wealth, If it doesn't come in, it's not going to change our perspective dramatically. But if it does come in, it's going to be a significant addition for future development. Turning to 49, we drilled this amine well three years ago now. Logs indicated 30 meters of hydrocarbons. We've done a number of studies. And we have planned to conduct a hydraulic frack of the tight sandstone to see if we can get anything to surface. But in parallel, we have also been looking at the overall prospectivity of Block 49, incorporating water data from adjacent Block 36, which was at the time held by EUG. of the United States, a company that was our partner in 1949. While we drill them, I mean well. We believe there are synergies between the blocks. And in particular, we believe there is a potentially very interesting geology in this part of Oman. It's a completely different basin from what's producing today in Oman. This is the Rub al-Khali Basin, which is really more to do with Saudi Arabia than with Oman. Our findings so far suggest there can be some quite interesting opportunities here, also outside of Thameen. So we've elected to enter into the second phase to be able to properly evaluate not only Thameen, but also the overall prospectivity of Block 49. We expect to see activity in the second half of the year And as we are now focusing, one, finalize the FTP for 56 and get that submitted to the ministry. Finalize preparations for canoes and spout that well in block 58. And then we will concentrate in the second half on resources on block 49.

Block three and four still.

all our financials and most of our balance sheet, although we are slowly transitioning away from that fact. A number of wells drilled, six development wells, oil producers, workovers, and water injectors. Appraisal wells within the greater Far South and Shahad areas. And exploration wells, near field exploration wells to be built in May. One in the far south targeting the quite prolific Barrick Formation. And two Shahad exploration wells targeting additional potential in the Hufai Formation to be built, expecting to start in July and November. And the large seismic acquisition program is nearing its end. We expect it to conclude in the third quarter this year, but of course interpretation primarily by the operator CCED has commenced. We remain positive to exploration potential within Blocks 3 and 4, both in the near field, which the operator is now targeting in the near term, but also in the far field, the JARI 1 discovery in Block 4, for example, warrants additional exploration. We'll also see what the new seismic is going to yield, both when it comes to gas potential in the northern part of Block 3. You see the purple dots there. And also additional opportunity around the JARI area in the southern parts of Block 4. On the infrastructure side, The gas to power project started up in Q4, is now being further implemented in Q1. And the purpose, of course, is to use associated gas to generate electricity, both to lower the carbon footprint from the associated gas, but also to limit the diesel consumption at substantial savings. for the production. Diesel is used primarily to fuel the pumps that are instrumental in bringing the production in Farha and Shahad to surface. Investment's ongoing, and the second phase is expected to be completed towards the end of this year.